Taiwan's inflation below 2% alert in 2025, lowest in 5 years

Taipei, Jan. 7 (CNA) Taiwan's inflation dipped to a low of 1.66 percent in 2025, the lowest annual figure in five years and the first time in four years it has fallen below a 2 percent alert set by the central bank, the Directorate General of Budget, Accounting and Statistics (DGBAS) said Wednesday.

Data compiled by the DGBAS showed the country's consumer price index (CPI) rose 1.66 percent in 2025, down from a 2.18 percent increase a year earlier. The 2025 figure was the lowest level since 2020, when the index contracted 0.23 percent, as COVID-19 pushed down crude oil and raw material prices.

The 2025 CPI growth also came below the DGBAS's forecast of 1.67 percent.

In December, the CPI rose 1.31 percent from a year earlier, largely on higher food prices, rents, and fuel prices, with the core CPI -- which excludes vegetables, fruit and energy -- up 1.83 percent, the data indicated.

On a month-on-month basis, the CPI rose 0.07 percent and after seasonal adjustments, the index also grew 0.14 percent, according to the DGBAS.

The DGBAS said food prices rose 1.24 percent, with prices of meat, eggs and grains-related items up 4.99 percent, 11.15 percent and 2.69 percent in December, while dining out expenses also rose 3.27 percent.

Living costs rose 1.86 percent in December as rents grew 1.99 percent and fuel and electricity rates rose 4.89 percent and 5.49 percent, respectively. It was the first time for rent growth to fall below 2 percent in about 30 months.

Speaking with reporters, DGBAS Senior Executive Officer Tsao Chih-hung (曹志弘) said dining out expenses rose above 3 percent for the 14th consecutive month, so despite rent growth moderating, consumers could not get a deep sense of falling inflation.

Last month, the cost of a basket of 17 government-monitored household necessities, including rice, pork, bread, eggs, sugar, cooking oil, shampoo, and toilet paper, rose 2.57 percent, down from 2.76 percent in November, the DGBAS said.

Meanwhile, the producer price index (PPI) fell 2.57 percent from a year earlier in December largely due to a decline in the price of agricultural products, oil, coal, chemical materials, drugs, and electronics components, the DGBAS added.

In 2025, the PPI fell 1.84 percent year-on-year.

Looking ahead, Tsao said inflation is likely to slow further to below 1 percent in January due to a relatively high comparison base over the same period of last year, when the Chinese New Year holiday fell. This year, the Chinese New Year holiday will fall in February.

Tsao said the DGBAS will look at inflation during January-February together to exclude seasonal factors.