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COST OF LIVING/Power rate hikes to push CPI up marginally in 2024: DGBAS

03/26/2024 10:25 PM
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CNA file photo

Taipei, March 26 (CNA) Two government institutions provided different assessments on the impact of upcoming electricity price rises on Taiwan's consumer price index (CPI) growth this year, with the Directorate-General of Budget, Accounting, and Statistics (DGBAS) forecasting an additional increase of 0.18 percentage points.

Meanwhile, the Central Bank forecast that 2024 CPI growth would be 0.27 percentage points higher after an average 11 percent hike in electricity rates decided during a meeting of the electricity price review committee of the Ministry of Economic Affairs last Friday takes effect.

The assessments were detailed in DGBAS and Central Bank reports which were provided to lawmakers for reference ahead of a hearing of the Legislature's financial committee slated for Wednesday.

Officials from the DGBAS, Central Bank and other relevant government agencies were invited to provide a briefing on the impact on commodity prices of the planned power rate hike on April 1 and the bank's decision to raise interest rates by 12.5 basis points last Thursday.

According to the DGBAS's macroeconomic model assessment, when the Central Bank increases key interest rates by 25 basis points, it results in a decrease of approximately 0.01 percentage points in economic growth in the first year.

Before accounting for the impact of the electricity price hike, on Feb. 29, the DGBAS forecast a 1.85 percent increase in the CPI for the year, its report indicated.

After considering the additional impact of the Central Bank raising key interest rates and the April electricity price hike, it now anticipates that the CPI for 2024 will rise by 2.03 percent, marking the third consecutive year of increases exceeding the bank's 2 percent alert level, the report said.

(By Pan Tzu-yu and Evelyn Yang)

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