Taiwan's September CPI growth slows to 1.25%, lowest in 4.5 years: DGBAS

Taipei, Oct. 8 (CNA) Taiwan's consumer price index (CPI) rose 1.25 percent year-on-year in September, the lowest increase in four and a half years and the fifth consecutive month below the 2 percent inflation alert level, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said Wednesday.

Core CPI, which excludes fruit, vegetables and energy, climbed 1.46 percent, a seven-month low, according to the agency.

DGBAS specialist Tsao Chih-hung (曹志弘) attributed the moderation in inflation to three factors: stable weather since mid-August which allowed vegetable production to recover; tax cuts and aggressive promotions for new cars that reduced transport costs; with a higher base effect because last year's Mid-Autumn Festival fell in September.

He added that Typhoon Ragasa's limited impact on agriculture also helped keep price growth low.

Despite the overall slowdown, the prices of key household essentials rose 2.47 percent year-on-year, the fastest pace in more than 18 months, led by pork prices, which surged 8.74 percent, and eggs which increased 5.94 percent due to seasonal and base effects.

Tsao said pork prices spiked temporarily around the Ghost Festival which fell on Sept. 6 but eased later in the month.

Addressing public concern over electricity price hikes that come into effect in October, Tsao said the adjustment will have a minimal impact, raising this year's CPI by 0.01 percentage points and next year's by 0.04 points. The increase mainly impact residential users, while small businesses will see costs rise by about NT$70 (US$2.29) per month, he said.

Discussing October, Tsao said stable weather could offset the electricity increase, keeping CPI growth similar to September.

He added that international commodity prices, including relatively low crude oil, and falling import prices are also expected to help contain domestic production costs and maintain price stability.