Economies across Asia are reporting a pickup in price pressures because of rising fuel and commodity costs, with China’s inflation at a 10-year high and Singapore’s inflation the strongest in more than 12 years. Taiwan’s central bank raised its benchmark interest rate last month to help contain price increases in the region’s fifth-largest economy.

“The inflation figure is quite high, surely putting pressure on the central bank to raise interest rates further,” said Tony Phoo, an economist at Standard Chartered Bank in Taipei. “We expect the central bank to raise rates by another 12.5 basis points in December.”

Food prices, which account for a quarter of the consumer price index, climbed 7.72 percent. Transportation costs increased 0.71 percent and housing costs, including gas and rent, rose 1 percent. The price of clothes jumped 3.5 percent.

“Retailers raised food prices because they had to pay higher prices for raw materials and energy,” Rita Hsueh, an economist at Taipei-based Industrial Bank of Taiwan, said before the report was released. “Pastries, eggs, milk, puddings, boxed lunches and almost every daily consumer good have become more expensive lately.”

The inflation report was released after the close of trading on the island’s stock exchange. The TAIEX index fell 0.1 percent to 9,617.26. The Taiwan dollar closed at NT$32.597 against its U.S. counterpart.

Core consumer prices, which exclude food and energy, rose 1.94 percent last month after expanding a revised 1.60 percent in August.

Import prices gained 7.98 percent. Wholesale prices increased 4.63 percent, the 23rd consecutive advance.

Central Bank Governor Perng Fai-nan raised Taiwan’s benchmark interest rate for a 13th consecutive quarter to 3.25 percent on Sept. 20.

“The risk of potential inflation is rising,” Perng said this week. An interest-rate increase “will help market rates gradually approach a neutral level to prevent inflation.”

Another Asian nation also reported a jump in consumer prices. In the Philippines, inflation accelerated to the fastest pace in eight months in September on food costs, the government said yesterday.

Subscribe to The China Post and save.  Click hereSharePrintEmail

Write a Comment

Enter your comments - 800 characters max

Receive China Post promos

Respond to this email