The nation’s consumer price index (CPI) shrank 0.81 percent annually last month, marking the seventh consecutive month in negative territory on falling fuel prices and travel spending amid the economic slump, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.
However, the contraction was still a significant improvement over the year-on-year decline of 2.32 percent reported in July, easing worries about looming deflation over the past several months as consumers delayed spending on travel and other nonessential expenses amid the rising jobless rate and falling wages.
Fuel prices have also hovered at a low level compared with a sharp increase last year.
“The decline was slower than my expectation of minus 1.4 percent,” said Cheng Cheng-mount (鄭貞茂), head economist at Citigroup Taiwan Inc. “This indicates consumer prices are stabilizing, which also means the nation’s central bank has no reason to boost key interest rates before the end of the year.”
The central bank may leave its benchmark interest rates unchanged at its quarterly meeting later this month after ending seven consecutive cuts in June in response to sings of gradual economic recovery.
The discount rate stands at a record low of 1.25 percent.
The core CPI, which excludes vegetables, fruit and fuel factors, slipped for the third month in a row, marking the second-biggest annual decline at 0.78 percent. It saw a record drop in July, DGBAS statistics showed.
“We are not worried about deflation now as the contraction has narrowed ... We expect the CPI to return to the positive side in the first quarter of 2010, though the recovery will be slow,” DGBAS section chief Wu Chao-ming (吳昭明) told a press briefing.
There are early signs of a pickup in the wholesale price index (WPI), which could increase the CPI once manufacturers pass higher costs on to consumers, Wu said.
Prices for select industrial raw materials including precious metals such as silver increased last month, implying that the overall economy is recovering, he said.
The drop in the WPI also slowed last month to a contraction of 11.24 percent year-on-year after a record fall of 13.97 percent in July.
For the full year, the CPI is expected to drop 0.68 percent from last year and prices may rise moderately at an annual rate of 0.87 percent next year, the DGBAS said.
In other words, Wu said, “there is no inflation risk on the horizon.”
COMPETITION: AMD, Intel and Qualcomm are unveiling new laptop and desktop parts in Las Vegas, arguing their technologies provide the best performance for AI workloads Advanced Micro Devices Inc (AMD), the second-biggest maker of computer processors, said its chips are to be used by Dell Technologies Inc for the first time in PCs sold to businesses. The chipmaker unveiled new processors it says would make AMD-based PCs the best at running artificial intelligence (AI) software. Dell has decided to use the chips in some of its computers aimed at business customers, AMD executives said at CES in Las Vegas on Monday. Dell’s embrace of AMD for corporate PCs — it already uses the chipmaker for consumer devices — is another blow for Intel Corp as the company
STIMULUS PLANS: An official said that China would increase funding from special treasury bonds and expand another program focused on key strategic sectors China is to sharply increase funding from ultra-long treasury bonds this year to spur business investment and consumer-boosting initiatives, a state planner official told a news conference yesterday, as Beijing cranks up fiscal stimulus to revitalize its faltering economy. Special treasury bonds would be used to fund large-scale equipment upgrades and consumer goods trade-ins, said Yuan Da (袁達), deputy secretary-general of the Chinese National Development and Reform Commission. “The size of ultra-long special government bond funds will be sharply increased this year to intensify and expand the implementation of the two new initiatives,” Yuan said. Under the program launched last year, consumers can
TECH PULL: Electronics heavyweights also attracted strong buying ahead of the CES, analysts said. Meanwhile, Asian markets were mixed amid Trump’s incoming presidency Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) shares yesterday closed at a new high in the wake of a rally among tech stocks on Wall Street on Friday, moving the TAIEX sharply higher by more than 600 points. TSMC, the most heavily weighted stock in the TAIEX, rose 4.65 percent to close at a new high of NT$1,125, boosting its market value to NT$29.17 trillion (US$888 billion) and contributing about 400 points to the TAIEX’s rise. The TAIEX ended up 639.41 points, or 2.79 percent, at 23,547.71. Turnover totaled NT$406.478 billion, Taiwan Stock Exchange data showed. The surge in TSMC follows a positive performance
FUTURE TECH: Nvidia CEO Jensen Huang would give the keynote speech at this year’s Consumer Electronics Show, which is also expected to highlight autonomous vehicles Gadgets, robots and vehicles imbued with artificial intelligence (AI) would once again vie for attention at the Consumer Electronics Show (CES) this week, as vendors behind the scenes would seek ways to deal with tariffs threatened by US president-elect Donald Trump. The annual Consumer Electronics Show opens formally in Las Vegas tomorrow, but preceding days are packed with product announcements. AI would be a major theme of the show, along with autonomous vehicles ranging from tractors and boats to lawn mowers and golf club trollies. “Everybody is going to be talking about AI,” Creative Strategies Inc analyst Carolina Milanesi said. “From fridges to ovens
RSS