Taiwan's inflation stays above 2% for third straight month in July

Taipei, Aug. 6 (CNA) Taiwan's consumer price index (CPI) rose 2.54 percent year-on-year in July, marking the third consecutive month in which inflation has remained above the government's 2 percent alert threshold, the Directorate General of Budget, Accounting and Statistics (DGBAS) said Thursday.

Core CPI, which excludes fruit, vegetables and energy prices, rose 2.38 percent in July, while the price of a basket of 17 government-monitored household necessities, including rice, pork, bread, eggs, sugar, cooking oil, shampoo and toilet paper, increased 1.95 percent, according to the DGBAS.

All three figures were lower than those recorded in June.

Tsai Hsiu-hui (蔡秀慧), an official with the DGBAS Department of Statistics, said the inflation rate for dining out rose to 3.05 percent, the highest level in the past six months.

Fuel prices also rose about 10 percent from 2025 as higher international energy prices, driven by the conflict in the Middle East, pushed up domestic fuel costs. Higher fuel surcharges also contributed to an increase in international airfares, she said.

Meanwhile, the producer price index (PPI), which measures prices received by producers, rose 16.94 percent year-on-year, the highest increase in four and a half years. The import price index (IPI), measured in New Taiwan dollar terms, climbed 28.19 percent, its highest level since the index was introduced 50 years ago.

The sharp increase in import prices has raised concerns about imported inflation.

Tsai said the rise in the IPI was mainly driven by higher prices for mineral products, as well as machinery and mechanical appliances, electrical equipment and related parts.

Prices for mineral products increased because of higher crude oil import costs, although domestic fuel prices remain subject to government stabilization measures, she said.

Meanwhile, prices for machinery and electronic products have been driven higher by booming demand for artificial intelligence (AI), which has pushed up the cost of products such as memory chips since the second half of 2025.

However, Tsai said the price increases for AI-related products are unlikely to have a significant impact on domestic inflation because most of the imported electronic components and memory products are used to manufacture goods for export.

The export price index, measured in New Taiwan dollar terms, also rose to a record high, increasing 31.56 percent year-on-year, according to DGBAS data.

Looking ahead, Tsai said vegetable prices in August may help ease inflation because prices were unusually high during the same period last year, creating a high comparison base. If weather conditions remain stable and no typhoons cause major agricultural damage, vegetable prices could decline and help ease overall CPI growth.

Nevertheless, inflation is expected to remain above 2 percent, she added.