Consumer prices drop 1.84% for ninth monthly decline

Prices declined 1.84 percent from a year earlier, the state statistics bureau said today in Taipei. That was more than the median estimate for a 1.1 percent drop in a Bloomberg News survey of 13 economists. They fell a revised 0.88 percent in September.

Central Bank of China, Taiwan (CBC) kept the benchmark interest rate at a record-low 1.25 percent in September as it seeks to spur a recovery from the island's deepest recession. Governor Perng Fai-nan told lawmakers Sept. 30 that prices are likely to remain “stable” over the next six months.

“I don't think the central bank will change its rate policy any time soon, given that there isn't much pressure on prices,” said Cheng Cheng-mount, an economist at Citigroup Inc.'s Taiwan unit.

The central bank said in September that it plans to maintain low borrowing costs because the economic recovery remains slow.

The Shin Kong Mitsukoshi, Taiwan's biggest department store chain, began annual discounts on Oct. 1. Taipei 101 and Far Eastern Department Stores Co. also lowered prices during the month. Breeze Center shopping mall and Living Mall offered annual discounts in September.

Food Prices

The report was released after the close of trading on the stock exchange. The TAIEX index declined 0.7 percent.

Food prices fell 4.49 percent from a year earlier after climbing 1.36 percent in September. Education and entertainment costs decreased 3.06 percent and the price of transport fell 0.86 percent.

Core consumer prices, a category excluding vegetables, fruit, fish and energy, slid 0.85 percent after falling a revised 0.97 percent in September.

Wholesale prices, which track the cost of goods sold to retailers and producers, fell 6.23 percent from a year earlier, compared with a revised 9.47 percent decrease in September.

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