Higher LNY service costs could boost February CPI growth by 0.7 points

Taipei, Feb. 7 (CNA) A spike in service expenses around the Lunar New Year holiday period is expected to raise Taiwan's consumer price index (CPI) growth for February by 0.6 to 0.7 percentage points, according to the Directorate General of Budget, Accounting and Statistics (DGBAS).

Speaking with reporters, DGBAS Senior Executive Officer Tsao Chih-hung (曹志弘) said that spending on services such as hairdressing and housekeeping, as well as increased taxi and hotel rates, is expected to push up inflation.

Bonuses given to babysitters or caregivers ahead of the New Year holiday are expected to further raise CPI growth, he added.

In addition, Tsao said that the price of certain foods favored by consumers during the holiday period, in particular white pomfret, considered to bring good luck and prosperity over the coming year, is expected to increase.

The DGBAS's data showed babysitting expenses in January 2025, when the Lunar New Year holiday fell last year, soared 38.93 percent from a year earlier, marking the highest growth among more than 300 service items during the month, while housekeeping costs also surged 17.57 percent.

The data also indicated that haircut prices and taxi fares grew 5.48 percent and 4.99 percent, respectively, in January 2025, with overseas group tour expenses and domestic hotel room rates rising 11.78 percent and 6.57 percent, respectively. In addition, pomfret prices also grew 11.87 percent in January 2025.

Judging from previous inflation records, Tsao said, these higher expenses, particularly in services, could push up the February CPI growth by 0.6 to 0.7 percentage points.

The silver lining was that chicken and pork stayed stable or even fell slightly from a month earlier in early February due to a supply glut, Tsao said.

In January, Taiwan's CPI grew 0.69 percent from a year earlier, marking the lowest growth in five years, largely reflecting a relatively low comparison base over the same period of last year due to seasonal factors.

Tsao said CPI growth in February is expected to expand due to the boost from the upcoming New Year holiday.

He said, however, taking into account the average inflation during January-February, CPI growth could stay below 1.5 percent, well below the 2 percent alert set by the central bank, indicating domestic inflation will remain stable.