COST OF LIVING/Taiwan's May CPI growth rises above central bank target

Taipei, June 6 (CNA) The local consumer price index (CPI) rose 2.24 percent from a year earlier in May, above the 2-percent warning level the central bank set for inflation, the Directorate General of Budget, Accounting and Statistics (DGBAS) said Thursday.

Data compiled by the DGBAS showed the CPI in May rose by more than 2 percent after a 1.94 percent increase in April.

Central bank governor Yang Chin-long (楊金龍) said earlier Thursday at a legislative committee meeting that the central bank's decision on whether to raise interest rates will hinge on inflation.

Meanwhile, core CPI, which excludes vegetables, fruit and energy, moved 1.84 percent higher in May, the DGBAS said.

The rise in May CPI was mainly driven by rising vegetable and fruit prices due to adverse weather conditions and increasing egg prices, DGBAS specialist Tsao Chih-hung (曹志弘) said at a press conference.

In May, food prices rose 3.43 percent from a year earlier, with the prices of vegetables and fruit up 11.75 percent and 8.66 percent, respectively, according to the DGBAS data.

Also of note, rent rose 2.6 percent from a year ago, marking the largest monthly growth in 28 years, Tsao said, adding that since July 2022, the average annual increase in the rent index has exceeded 2 percent and remained at that level.

Tsao attributed soaring rent prices to spiking consumer prices, rising property maintenance costs, as well as higher interest rates and increasing housing prices.

Meanwhile, the cost of dining out in May was up 2.79 percent year-on-year, the lowest in 29 months, due to the high comparison base last year but up 0.27 percent from April, Tsao said.

More expensive medical costs also drove up the May CPI, according to DGBAS.

In May, medical costs rose 3.45 percent from a year earlier because of higher registration fees required by some clinics as well as an increase in payments by patients under the National Health Insurance scheme, the DGBAS said.

Looking to June, Tsao said CPI growth could be stronger owing to vegetable and fruit price fluctuations caused by recent rainy days, but if vegetables and fruit are excluded, other consumer prices are expected to be relatively stable, with an increase of about 1 percent.