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Updated Wednesday, February 8, 2012 0:03 am TWN, The China Post news staff

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Consumer prices seen to stabilize for Feb.

The China Post news staff--Consumer prices in Taiwan are expected to take a dip in February after a steep increase in January bolstered mainly by rising demand during the long Chinese Lunar New Year holidays and weather conditions that raised vegetable prices, according to the director of Government Information Office (GIO).

The surging demand for holiday festivities lifted consumer price index (CPI) by 2.37 percent last month from the same period of 2011 for steepest rise in three years and three months.

Prices of food items registered the biggest jump of 4.54 percent with vegetables soaring by 42.03 percent while eggs jumped 14.69 percent and dairy products moved up by 7.31 percent, according to the Directorate General of Budget, Accounting & Statistics (DGBAS).

Eating out also increased 2.14 percent for the sharpest gain since April 2009.

Other factors for the price hikes included the higher wages for nannies (up by 97 percent as well as increased taxi fares and hikes in traveling costs during the long holidays.

Among the 424 items of products and services under observation, 297 posted rises.

Vegetables with more drastic price increases included radish, cabbage, corn, cauliflower, scallions, and tomato.

Other gainers included grains and related products, up by 3.99 percent; and fishery products, up 3.90 percent.

Prices for most other commodities and services remained relatively stable.

Fruits and vegetables with bigger price drops include garlic, ginger, papaya, banana, grape, and ginger.

Other items with price decreases included memory cards storing images, mobile phones, portable PCs, and telecommunications fee for hooking up with Internet.

Government officials said they are still closely monitoring the price movements with the anticipation that the prices will drop for February due to the conclusion of the Lunar New Year holidays

Yang Yung-ming, director general of the GIO and spokesman of the Executive Yuan (Cabinet), said the CPI for January edged up less than 1 percentage point when excluding the New Year factor and abnormal weather conditions.

He said vegetable prices are expected to return to normal levels this month with temperatures gradually getting warmer. But the government will maintain close watch over the situation.

Amid public concern that commodity prices could surge suddenly due to disruptions in supply because of unstable weather conditions, Yang said the Cabinet will hold price stabilization meeting and coordinate with all relevant departments to take necessary measures to deal with the situations and maintain prices at stable levels, he said.

Government agencies like the Council of Agriculture will also take more flexible measures to release inventories of vegetables and fruit to the market to help prevent price jumps again.

Yang said the government has set the projected increase in CPI at 1.29% for the whole year of 2012.

The rise in the figure will be milder than most neighboring nations. But it will also be bigger challenge for all government departments to attain the target, he added.

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