COST OF LIVING/CPI growth in September falls below central bank 2% target

Taipei, Oct. 9 (CNA) Taiwan's consumer price index (CPI) growth eased to 1.82 percent from a year earlier in September, lower than the 2 percent inflation alert set by the central bank and the lowest since February, helped by a slump in egg prices, the Directorate General of Budget, Accounting and Statistics (DGBAS) said Wednesday.

Figures released by the DGBAS showed that on a month-to-month basis, the CPI rose 0.11 percent, or 0.38 percent with seasonal adjustments.

The September figure was lower than August, when year-on-year CPI growth hit 2.35 percent, the fourth consecutive month in which year-on-year inflation breached 2 percent.

Speaking with reporters, DGBAS specialist Tsao Chih-hung (曹志弘) said the moderate CPI growth in September was due to Typhoon Haikui which ripped across Taiwan in the same month last year and a high comparison base, as well as the release of produce onto the market following the post-storm resumption of vegetable cultivation and falling crude oil prices.

In addition, the average price of 17 daily necessities monitored by the Executive Yuan's price stability group declined 0.01 percent year-on-year, with chicken eggs falling the steepest at 18.45 percent.

However, core CPI, which excludes fruit, vegetables and energy, rose 1.79 percent from a year earlier in September, below the 2 percent alert for the sixth consecutive month, according to Tsao.

The cost of services increased 2.36 percent, due mainly to surging medical expenses and dining out and rent prices, he added.

He further said that although growth in the cost of services continued to moderate, it remained above the 2 percent inflation alert and future attention should be paid to changes in the price of services.

In September, electricity prices rose 5.21 percent before industrial users in Taiwan have their electricity rates increased by an average of 12.5 percent from Oct. 16. However, with rates for most households and small businesses not being raised the hikes are unlikely to have a huge impact on the CPI, Tsao said.

In the same month, food prices, the largest category by weighting to make up the CPI, rose 3.00 percent from a year earlier after Typhoon Gaemi, which hit Taiwan in late July, lowering fruit supplies and boosting prices by 17.37 percent from a year earlier.

Meanwhile, the price of cooking oil and the cost of dining out rose 8.56 percent and 2.98 percent, respectively, from a year earlier.

However, egg and vegetable prices fell 15.49 percent and 4.21 percent year-on-year, respectively, according to the data.

In the first nine months of this year, the CPI increased 2.26 percent from a year earlier, above the 2 percent inflation level, according to DGBAS data.

Looking ahead, Tsao said the CPI and core CPI are expected to remain below the 2 percent target in October with vegetable prices likely to climb due to the effects of storms in September and October, but due to the high comparison base last year the price increase might not send the CPI significantly higher.