Inflation up 1.64% in June, biggest gain in 14 months
July 9, 2014, 12:01 am TWN
TAIPEI--Taiwan's consumer price index rose 1.64 percent in June from a year earlier largely due to continuing increases in food prices, which was the biggest monthly gain in 14 months.
The Directorate General of Budget, Accounting and Statistics (DGBAS) said basic living costs were on the rise during the month, in particular the cost of electricity, which also contributed to rising inflation.
The rise in the CPI in June was similar to that in May (1.62 percent) and just below the 1.66 percent rise in April, which was the biggest monthly gain in 14 months. In the first six months of this year, Taiwan's CPI was up 1.21 percent from a year earlier.
Rate Hike Looms:DBS
DBS Bank has predicted that higher consumer prices will prompt Taiwan's central bank to kick off a rate hike cycle at the end of the fourth quarter at the earliest.
Several financial institutions, including DBS Bank and Standard Chartered Bank, expect Taiwan to face stiffer inflationary pressures in the second half of the year on expectations that food prices will continue to rise.
But Tsai Tai-yu, deputy director of the DGBAS's census department, said that excluding food prices, the CPI rose only 0.89 percent in June from a year earlier, indicating that local consumer prices remained stable.
Core inflation, which excludes the prices of fruits, vegetables and energy, was up 1.48 percent in June year-on-year.
Food prices rose 3.78 percent in June, with egg prices up 18.17 percent, meat prices up 12.18 percent, fish prices up 8.30 percent, and fruit prices up 4.02 percent year-on-year, the DGBAS statistics showed.
Vegetable prices in June were down 2.04 percent from a year earlier, however, partially offsetting the impact of hikes in other food items, the figures showed.
The spike in food prices, which account for a greater part of a low-income family's budget, pushed the CPI for low-income families up 1.90 percent year-on-year in June, higher than the 1.72 percent and 1.54 percent gains in the CPIs for mid- and high-income families, respectively, Tsai said.
Dining-out Costs Set Record
Due to higher food prices, the cost of eating out rose 3.96 percent from a year earlier, the highest monthly rise since January 2009, when dining-out costs increased 4.96 percent year-on-year, the DGBAS said.
The statistics showed that a Taiwanese household with monthly expenses of NT$60,000 (US$2,007) had to spend an additional NT$239 in dining-out costs in June compared with the same month last year.
Housing costs rose 1.16 percent from a year earlier, with electricity rates going up 5.69 percent and prices of natural gas for cooking and heating water rising 2.61 percent year-on-year, the statistics showed.
The DGBAS said the price of a basket of 17 household necessities, including rice, pork, bread, eggs, sugar, cooking oil, shampoo and toilet paper, rose at an annual rate of 6.06 percent in June, down slightly from the 6.70 percent increase seen in May, which was a 63-month high.
Taiwan's wholesale price index (WPI) rose 0.81 percent from a year earlier because of increases in the prices of crude oil, electricity and base metal products. Cheaper computer, optoelectronics and other electronics gadgets helped offset some of those increases.
In the first half of the year, Taiwan's core CPI rose 0.99 percent year-on-year, and the WPI gained 0.39 percent, the DGBAS said.