CPI rises to near four year annual high

Taiwan’s consumer price index (CPI) for December dropped 1 percent from the previous month, but was up 1.4 percent for the year, mainly because of a spike in food prices, government statistics showed Thursday.

This represented the highest annual increase in inflation in nearly four years, according to the Directorate General of Budget, Accounting and Statistics (DGBAS).

Food prices rose by 5.24 percent for the year, the biggest increase since an 8.55 percent increase in 2008.

The DGBAS said the main factor driving the increase in food prices was a hike in the prices of fruits and vegetables.

Fruit prices increased 18.81 percent, while vegetable prices jumped 22.45 percent in 2016, both the highest in nearly 11 years. The previous high was recorded in 2005 when fruit and vegetable prices rose 19.31 percent and 29.34 percent.

For 2016 as a whole, the CPI increased by 1.4 percent, with core inflation, which excludes fruits, vegetables and energy, rising 0.84 percent, the DGBAS said.

The CPI dropped 1 percent in December from the previous month mainly because of good weather during the vegetable harvest season and year-end promotional sales of clothing. However, that fall was partially offset by fuel and fruit price hikes.

December’s CPI was 1.7 percent higher than the same month last year because fruit, vegetable, fishery products, processed food, meat and fuel prices were higher, as was the cost of dining out and water rates.

However, that increase was partially offset by the lower cost of eggs, fuel, consumer electronic products and telecommunication rates.

The DGBAS also said that the implementation of the new work rules on vacation days and a 40-hour work week could increase inflationary pressure on consumer prices, predicting an increase of 0.3 percentage points in the CPI year-on-year.

Source: Focus Taiwan News Channel