TAIPEI: The nation’s consumer price index (CPI) rose 1.24 percent last month from a year earlier, while easing from April’s 1.87 percent, as fruit and vegetable prices soared at the fastest pace in more than a decade, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.
Food costs, which account for 25 percent of the overall inflation gauge, increased 5.82 percent as fruit prices jumped 31.18 percent and vegetable prices surged 20.02 percent, the agency said.
“Together, they raised the CPI reading by 1.16 percentage points,” more than muting the effect of cheaper crude oil prices, DGBAS Deputy Director Tsai Yu-tai told a news conference.
Fishery products and meat helped push CPI higher with an increase of 4.08 percent and 3.27 percent respectively, while dining costs rose 1.33 percent, according to a report by the DGBAS.
Dining costs, which account for 10 percent of the inflationary measure, because many Taiwanese eat out, advanced at the slowest pace in 29 months due to discounts by retailers to promote sales, the report said.
The CPI reading edged up only 0.08 percent after seasonal adjustments, indicating inflationary pressure is benign.
The core CPI, a more reliable indicator of long-term inflationary trend because it excludes volatile items such as vegetable and energy costs, increased 0.91 percent, unchanged from one month earlier.
“The core figures affirm a moderating inflation, with the increase in food costs slowing from 8 percent during the peak of bad weather,” Tsai said.
Australia and New Zealand Banking Group (ANZ) echoed the observation, saying the CPI would have contracted 0.46 percent excluding food costs.
“The outlook for inflation should continue to trend down unless in the absence of drastic weather risks,” ANZ Hong Kong-based economist Raymond Yeung said in a report.
The wholesale price index — a measure of production costs — fell 2.8 percent last month from a year earlier, narrowing from a revised 4.18 percent decline in April, thanks to stabilizing raw material prices, the report said.
Cheaper crude oil prices last month dragged export prices by 7.25 percent in US dollar terms and might continue to hurt exports in the near future, the report said.
The mild inflation would give the central bank room to lower interest rates by 12.5 basis points at the end of this month to support economic growth, Yeung said.
In the first five months of this year, the CPI climbed 1.67 percent while the wholesale price index fell 4.39 percent, the report said.
