The consumer price index (CPI) gained 1.97 percent last month from a year earlier, the fastest rise in eight months, as vegetable and fruit prices remained high due to continued supply shortages caused by typhoons in September, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.
The increase in the headline inflationary gauge might not spur the central bank to raise interest rates later this month, as such a move could derail the economy’s fragile recovery, economists said.
“Of major consumer items, the food category posed the biggest increase of 6.42 percent as the effect of bad weather lingered, pushing fruit and vegetable costs up by 37.53 and 9.56 percent respectively,” DGBAS Deputy Director Tsai Yu-tai (蔡鈺泰) told a news conference.
Together, fruit and vegetable price hikes lifted CPI by 1.44 percentage points last month, more than offsetting the benefits of cheaper electricity and gas costs, Tsai said.
As food costs account for 25 percent of CPI makeup, people with low incomes felt the pinch more, Tsai said.
The readings translate to a 2.35 percent rise in spending for low-income households and a 0.55 percent increase for people with higher incomes, Tsai said.
The inflationary measure after seasonal adjustment inched up 0.29 percent, suggesting mild and stable consumer prices, the DGBAS report said.
Core CPI, a more reliable indicator of long-term inflationary trends because it excludes volatile items, registered a 0.84 percent advance, easing from a 0.96 percent increase a month earlier, the report said.
Transportation and communications costs increased 0.5 percent, up for the third consecutive month, after international crude and raw material prices recovered from two years of sof prices, Tsai said.
CPI rose 1.36 percent from a year earlier, while core CPI averaged 0.84 percent, comfortably below the 2 percent alarm for monetary tightening, Mega Securities Co (兆豐證券) economist Lucas Lee (李志安) said.
“The benign CPI would allow the central bank room to keep interest rates unchanged for the coming six months to support economic growth, despite a likely rate hike by the US Federal Reserve later this month,” Lee said by telephone.
Healthy economic data in the US merit the monetary move, Lee said, adding that US president-elect Donald Trump’s policy plans could affect GDP growth.
The wholesale price index — a measure of production costs — fell 0.28 percent last month from a year earlier, the smallest decline in 27 months, Tsai said.
Export prices rose 0.52 percent in US dollar terms last month, as selling prices for plastic and chemical products picked up, the statistics agency said.
The trend will lend support to the nation’s exports showing last month, which Mega Securities forecast to show a 9 percent increase from a year earlier.
The Ministry of Finance is to unveil export data for last month today.
For the first 11 months of the year, WPI fell 3.39 percent from the same time last year, the report said.
ADVANCED: Previously, Taiwanese chip companies were restricted from building overseas fabs with technology less than two generations behind domestic factories Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), a major chip supplier to Nvidia Corp, would no longer be restricted from investing in next-generation 2-nanometer chip production in the US, the Ministry of Economic Affairs said yesterday. However, the ministry added that the world’s biggest contract chipmaker would not be making any reckless decisions, given the weight of its up to US$30 billion investment. To safeguard Taiwan’s chip technology advantages, the government has barred local chipmakers from making chips using more advanced technologies at their overseas factories, in China particularly. Chipmakers were previously only allowed to produce chips using less advanced technologies, specifically
The New Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility. A strategy of borrowing the New Taiwan dollar to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns. The New Taiwan dollar may soon replace its Chinese peer as the region’s favored carry trade tool, analysts say, citing Beijing’s efforts to support the yuan that can create wild swings in borrowing costs. In contrast,
BRAVE NEW WORLD: Nvidia believes that AI would fuel a new industrial revolution and would ‘do whatever we can’ to guide US AI policy, CEO Jensen Huang said Nvidia Corp cofounder and chief executive officer Jensen Huang (黃仁勳) on Tuesday said he is ready to meet US president-elect Donald Trump and offer his help to the incoming administration. “I’d be delighted to go see him and congratulate him, and do whatever we can to make this administration succeed,” Huang said in an interview with Bloomberg Television, adding that he has not been invited to visit Trump’s home base at Mar-a-Lago in Florida yet. As head of the world’s most valuable chipmaker, Huang has an opportunity to help steer the administration’s artificial intelligence (AI) policy at a moment of rapid change.
TARIFF SURGE: The strong performance could be attributed to the growing artificial intelligence device market and mass orders ahead of potential US tariffs, analysts said The combined revenue of companies listed on the Taiwan Stock Exchange and the Taipei Exchange for the whole of last year totaled NT$44.66 trillion (US$1.35 trillion), up 12.8 percent year-on-year and hit a record high, data compiled by investment consulting firm CMoney showed on Saturday. The result came after listed firms reported a 23.92 percent annual increase in combined revenue for last month at NT$4.1 trillion, the second-highest for the month of December on record, and posted a 15.63 percent rise in combined revenue for the December quarter at NT$12.25 billion, the highest quarterly figure ever, the data showed. Analysts attributed the
RSS