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COST OF LIVING/January CPI growth falls to 7-month low

02/06/2024 08:48 PM
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Shoppers walk around Taipei's Q Sqaure shopping mall in this CNA file photo
Shoppers walk around Taipei's Q Sqaure shopping mall in this CNA file photo

Taipei, Feb. 6 (CNA) Growth in Taiwan's consumer price index (CPI) for January fell to the lowest level in seven months and dipped below the 2 percent alert set by the local central bank, the Directorate General of Budget, Accounting and Statistics (DGBAS) said Tuesday.

Data compiled by the DGBAS showed the January CPI rose 1.79 percent from a year earlier, the slowest growth since June 2023, when the index increased 1.75 percent year-on-year.

The DGBAS said the moderating CPI growth largely resulted from a relatively high comparison base over the same period of last year, when the Lunar New Year holiday fell in the second half of the month.

DGBAS specialist Tsao Chih-hung (曹志弘) said the New Year holiday boosted personal services expenses such as an increase in pay for children's babysitters and a hike in taxi fares during the New Year holiday, sending the comparison base higher.

The core CPI, which excludes vegetables, fruit and energy, rose 1.64 percent from a year earlier, the data indicated.

On a month-on-month basis, the local CPI stayed little changed but after seasonal adjustment, the index rose 0.21 percent, according to the DGBAS.

Excluding New Year holiday effects, the local CPI would have risen 2.4 percent from a year earlier in January, with the core CPI up 2.3 percent. However, growth still slowed from 2.70 percent growth in CPI and 2.43 percent in core CPI growth in December, indicating inflationary pressure in the country is on the decline, Tsao said.

In January, expenses for miscellaneous items fell 0.30 percent from a year earlier after personal care costs plunged 16.67 percent from a high comparison base a year earlier, the DGBAS said.

The DGBAS said food prices rose 4.10 percent from a year earlier in January with the price of fruit, meat, frozen food and grains up 20.86 percent, 5.63 percent, 4.31 percent and 3.35 percent, respectively, from a year earlier. In addition, dining out costs also rose 4.00 percent year-on-year in January.

However, vegetable prices bucked the upturn, falling 14.54 percent from a year earlier in January on the back of stable supplies, which offset food price growth in the month, the DGBAS said.

According to the DGBAS, food prices accounted for 26.753 percent of January's CPI.

Living costs in January rose 1.75 percent from a year earlier with home maintenance costs, rents and electricity bills rising 3.47 percent, 2.14 percent and 1.30 percent, respectively, in January, the DGBAS added.

The DGBAS said living costs made up 22.771 percent of the January CPI.

The cost of a basket of 17 government-monitored household necessities, including rice, pork, bread, eggs, sugar, cooking oil, instant noodles, shampoo and toilet paper, rose by 3.27 percent from a year earlier in January after a 3.31 percent increase in December, the DGBAS said.

It was the sixth consecutive month in which the rise in the cost of the 17 items was down from a year earlier, the DGBAS's data showed.

However, growth in the price of pork and chicken among the 17 items still topped 5 percent in January, the DGBAS added.

CPI growth could still top 2 percent in February on seasonal factors as the seven-day New Year holiday will start on Feb. 8, pushing up personal services costs, Tsao said.

Reflecting the fall in imported raw material prices, the producer price index (PPI) for January fell 0.46 percent from a year earlier as state-owned oil company CPC Corp., Taiwan, cut natural gas prices, while the price of crude oil, coal products, base metals, chemical raw materials, paper items, pulp and drugs also moved lower, the DGBAS said.

Nevertheless, the decline in the PPI was partially offset by increases in electricity rates and higher agricultural product prices, the DGBAS said.

The import price index fell 3.29 percent from a year earlier in January in Taiwan dollar terms and also dropped 5.67 percent in U.S. dollar terms, while the export price index rose 0.16 percent in Taiwan dollar terms but dropped 2.31 percent in U.S. dollar terms, the data showed.

In November, the DGBAS forecast Taiwan's CPI will grow 1.64 percent in 2024, which would moderate from a 2.49 percent increase in 2023.

The DGBAS will update its forecast of Taiwan's 2024 CPI growth at the end of February.

(By Pan Tzu-yu and Frances Huang)

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