Feb. consumer price growth may hit 3%
CNATAIPEI -- Local consumer prices in February could rise by 3 percent over the year-earlier level as the Feb. 9-17 Lunar New Year holiday boosts domestic demand, a think tank said Wednesday.
February 7, 2013, 11:29 am TWN
With the holiday approaching, local wholesale vegetable prices have risen 10 percent since the beginning of this month, and the uptrend is expected to continue to add upward pressure on local consumer prices for the rest of the month, Yuanta Polaris Research Institute said.
In addition, the think tank said, on the back of rising international crude oil prices, the price of domestic 95-octane unleaded gasoline gained more than 10 percent in early February from a year earlier.
Yuanta-Polaris said other items such as dining out costs and home-helping service expenses, are likely to pick up further later this month.
The think tank said that as last year's Lunar New Year holiday fell in January, the comparison base from last February is relatively low, which is expected to make the growth in consumer prices for this month appear significant.
Under such circumstances, growth of the local consumer price index (CPI) for February could reach as high as 3 percent, well above the local central bank's inflation target of 2 percent.
In January, Taiwan's CPI rose 1.15 percent from a year earlier, driven higher mainly by increases in prices of fruit, fuel and electricity.
The forecast echoed a government prediction in which the Directorate General of Budget, Accounting and Statistics (DGBAS) said upward pressure on local consumer prices in February will increase due to the holiday effect.
Wang Shu-chuan, a DGBAS section chief, said the costs of several services, such as taxis, haircuts and hotel stays are expected to rise before and during the holiday.
The official said, however, that the inflation data for a single month is not enough to judge a trend, so the public should monitor the average CPI for January and February to get a better understanding of where consumer prices are headed this year.