TAIPEI: The nation’s consumer price index (CPI) rose 2 percent last month from a year earlier as cold weather continued to drive up food costs, with vegetable and fruit prices staying at a 21-year high, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.
It is the second consecutive month the inflationary gauge has hit the 2 percent level, but the statistics agency dismissed concerns, saying the phenomenon would prove to short-lived once weather disruptions fade.
“Last month saw little correction in vegetable prices due to lingering supply disruptions, even though holiday demand subsided,” DGBAS Deputy Director Tsai Yu-tai told a news conference.
Vegetable prices surged 79.1 percent year-on-year last month, little changed from an 81 percent increase in February, as humid weather and inadequate sunlight thwarted supply, Tsai said.
Likewise, fruit prices recorded an 18.99 percent increase last month, the DGBAS report said, adding that together, the two items raised the CPI reading by 2 percentage points.
Food costs, which account for 25 percent of the index, climbed 8.62 percent last month, rising at the fastest pace in 43 months with contributions also from fishery products, processed food and dining costs, the report said.
The inflationary measure fell 0.18 percent last month after seasonal adjustments, affirming a very limited change, the report said.
Core CPI, a more reliable gauge to monitor long-term price movements because it excludes volatile items, printed a 0.79 increase last month, lending support to benign inflation, Tsai said.
For the first quarter, the CPI picked up 1.74 percent, faster than the agency’s forecast in February at 1.24 percent, the report said, suggesting higher general living costs amid a poor economy.
The cost burden comes despite crude oil prices declining 13.22 percent year-on-year last month, dragging transportation and communication costs by 2.59 percent, the report said.
The wholesale price index — a measure of production costs — fell 4.94 last month, stable from a revised 4.92 percent decline in February, the report said, as the world is ready to closely watch a meeting of oil-producing countries on April 17.
Cheaper oil helped sink export prices by 7.26 percent last month in US dollar terms, meaning an equal volume of shipments would cost less this year, the report said.
That is unfavorable for exports, Minister of Finance Chang Sheng-ford said, as it indicated Taiwan might have continued to contract by double percentage digits last month.
A higher CPI would allow the central bank less leeway for monetary easing, as the policymaker is widely predicted to be cutting interest rates by another 12.5 basis points in June to support GDP growth.
