Taiwan's inflation rate rises 1.75% in February

Taipei, March 6 (CNA) Inflation in Taiwan rose 1.75 percent in February, and is expected to remain below the 2 percent warning threshold in March, despite rising oil prices driven by the war in the Middle East, an official said Friday.

The 1.75 percent spike in the consumer price index (CPI) -- up from 0.69 percent in January -- was partly attributed to seasonal factors, specifically higher charges in the service sector typically seen during the Lunar New Year holidays, according to the Directorate-General of Budget, Accounting and Statistics (DGBAS).

Core CPI, which excludes fruit, vegetables and energy, rose 2.6 percent year-on-year, higher than the 1.24 percent increase recorded in January, the DGBAS said.

Beyond the holiday-induced surges, the DGBAS added that the persistent rise in dining-out costs, albeit with a slight easing in the pace of the increase, continued to exert upward pressure on the overall price index.

Nonetheless, excluding Lunar New Year effects, CPI for the first two months of the year stood at 1.23 percent, suggesting that prices remained stable, the DGBAS said.

Breaking down the CPI by category, DGBAS Senior Executive Officer Tsao Chih-hung (曹志弘) told reporters that dining-out costs rose 2.8 percent year-on-year, ending a 15-month streak of increases of more than 3 percent.

The increase in rent in February was 1.85 percent, continuing a slowdown from January, when the increase was 1.99 percent following a 29-month stretch of growth, and marking the lowest level in four years, Tsao said.

Among key consumer goods in the CIP basket, which rose 2.57 percent in February, down from 3.12 percent in January, eggs surged 28.44 percent and pork 6.65 percent, the largest increases in the category, according to the DGBAS.

The DGBAS forecast March CPI will maintain a relatively stable pace, even as the war in the Middle East -- which began last Saturday when the U.S. and Israel launched aerial attacks on Iran -- continues to push oil prices higher.

Tsao said the government has implemented several measures to stabilize oil prices, including tax reductions on imports of certain essential raw materials, as well as gasoline and petroleum, to keep Taiwan's oil prices lower than those of neighboring countries.

The surges in Brent crude oil are expected to have a limited impact on Taiwan's economy, as the stabilization measures are likely to offset the effects, making it likely that March CPI will remain below the 2 percent warning level, Tsao said.