Taiwan's consumer price index eases to 1.37%, a 4-year low: DGBAS

Taipei, July 8 (CNA) Taiwan's consumer price index (CPI) declined for the third consecutive month in June, with the year-on-year growth rate falling to 1.37 percent, the lowest in more than four years, the Directorate General of Budget, Accounting and Statistics (DGBAS) reported Tuesday.

The CPI increase in June had moderated compared with the 1.55 percent growth in May, marking the second consecutive month of growth below the 2 percent inflation alert threshold set by the central bank, according to data compiled by the DGBAS.

The low consumer price increase in June was mainly due to the Dragon Boat Festival falling in June last year, which created a relatively high base for comparison, contributing to the lowest year-on-year CPI growth rate in more than four years, DGBAS specialist Tsao Chih-hung (曹志弘) said at a news briefing.

In June, core CPI, which excludes fruit, vegetables and energy, rose 1.47 percent from a year earlier, remaining below the 2 percent inflation alert threshold for the 15th consecutive month.

However, Tsao noted that while overall prices stabilized in June, dining-out expenses still rose by 3.44 percent, and rent increased by 2.3 percent. In addition, the prices of many frequently purchased consumer goods also went up, so the public may still feel the impact of inflation.

In June, the domestic wholesale price index fell 6.94 percent year-on-year. This decline has helped reduce production costs across various stages -- from raw materials to intermediate goods -- thereby easing upward pressure on commodity prices. As a result, prices are expected to stabilize further by the fourth quarter, according to Tsao.

Despite the slow growth in CPI, the DGBAS said food prices increased 2.82 percent from a year earlier in June, while dining out costs also rose 3.44 percent from a year earlier, pushing up CPI growth in the month.

According to DGBAS statistics, dining-out expenses have increased by more than 3 percent for eight consecutive months, though the June increase was slightly lower than that in May. Rent has not surpassed the highs seen in previous months.

Looking ahead, Tsao said that the weather is an important factor affecting the CPI.

As Typhoon Danas hit central and southern Taiwan at the beginning of July, causing rain-related disasters in the country, consumer prices are expected to rise in the month, he said.

However, since there was also a typhoon in July last year and the comparison base was high, the CPI growth is expected to continue slowing down quarter by quarter this year, Tsao added.

Tsao said it is highly likely that inflation will remain below 2 percent in July, and that CPI growth will continue to slow in the third and fourth quarters of this year.

Looking more broadly at how the global situation may impact Taiwan's consumer prices, Tsao pointed out that due to high international uncertainty and weak global end-user demand, international raw material prices have been trending downward.

At the same time, the recent rapid appreciation of the Taiwan dollar against the U.S. dollar in May and June pushed the import price index in Taiwan dollar terms down by 10.35 percent year-on-year in June, the largest decline in 57 months, Tsao said.