Consumer price growth to fall below 3%: Polaris
September 7, 2012, 12:19 am TWN
TAIPEI--Polaris Research Institute, one of Taiwan's leading economic think tanks, said yesterday the increase of local consumer prices is expected to slow down to some extent and fall below the 3 percent mark in September.
Polaris Research said the hike in the consumer price index (CPI) for September could range between 2.6 and 2.7 percent, down from an increase of 3.42 percent recorded in August, as weather forecasters have not indicated that typhoons will hit the island during the month.
The 2.6-2.7 percent hike, however, remains high and will impose inflationary pressure on the local economy, the think tank said.
Last month, the CPI growth hit the highest level in four years on a jump in food prices as torrential rains brought by successive typhoons damaged agricultural harvests.
In the month, vegetable prices surged 57.93 percent and fruit prices soared 20.14 percent from a year earlier to boost food prices as a whole by 8.66 percent, according to the government statistics.
The last high of 4.68 percent in the CPI hike was seen in August 2008 due to rising international crude oil prices and growing commodity agricultural prices at that time.
Despite the stable weather conditions expected in September, Polaris Research said, price increases for egg, dairy goods and fishery products are likely to remain high based on a relatively low comparison base for the same period of last year, while recent gas price hikes are expected to contribute to the CPI increase.
The think tank said as the market has embraced high hopes that the U.S. Federal Reserve will launch a third round of quantitative easing, international crude oil prices are expected to stay high, which will add upward pressure on local consumer prices in September.
In June, Polaris Research forecast the local CPI for 2012 would rise 1.9 percent from a year earlier, while the institute cut its estimate of Taiwan's gross domestic product (GDP) growth to 2.5 percent from 3.88 percent. The think tank said it will release a revision of the 2012 GDP and CPI forecasts later this month.
In August, the government lowered its forecast of the 2012 GDP growth to 1.66 percent from an early estimate of 2.08 percent, while raising its prediction of the CPI growth to 1.93 percent from 1.90 percent.