Consumer prices to be stable through December: think tank
December 7, 2013, 12:08 am TWN
TAIPEI -- Local consumer prices are expected to be stable throughout December due largely to a recovery in vegetable and fruit supplies, a think tank said Friday.
In a research report, the Yuanta-Polaris Research Institute said that prices will also be kept down by discounts aimed at spurring interest in electronics and home appliances vendors, department stores, and hypermarkets amid slow economy growth.
As a result, Taiwan's consumer price index (CPI) is likely to grow at a pace near the annual 0.67 percent increase seen in November, according to Yuanta-Polaris.
That growth is well below the previous estimate of a 1 percent year-on-year rise in November, a stable rise that the think tank expects to continue through this month.
The CPI has grown less than 1 percent annually for seven consecutive months, with August's numbers even showing a 0.78 percent decrease from a year earlier, indicating little volatility in domestic consumer prices, the think tank said.
November's rise was attributed to a 19.33 percent increase in produce prices from vegetable shortages dating back to typhoons in September, according to the Directorate-General of Budget, Accounting and Statistics (DGBAS).
But even the 19.33 percent growth is less than the 26.25 percent year-on-year increase seen in October, which Yuanta-Polaris said indicates recovering vegetable supplies.
The growth of food prices should slow further in December and stabilize consumer prices overall, the think tank said.
There will, however, be some upward pressure from electricity rate hikes which took effect in October and a mild increase in international crude oil prices seen in early December, it said.
In September, Yuanta-Polaris forecast that the CPI for the year would rise 1.09 percent from a year earlier, but it now says the forecast could be cut when an update is released Dec. 25.
In its latest forecast from late November, the DGBAS said the 2013 CPI is expected to grow 0.94 percent from a year earlier, a downward revision from the 1.07 percent estimated in August.