Tue, Oct 06, 2009 page12

• CPI down on weak demand: DGBAS

  NUMBERS TALK Prices for fruit and vegetables were stable and cultivation was unlikely to be affected by Tropical Storm Parma, as most farmland is in the south

  • By Crystal Hsu / STAFF REPORTER
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  The nation’s consumer price index (CPI) dropped 0.86 percent last month from last year on weak demand amid the economic downturn, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.

  The statistics agency also published a series of living cost indexes for the first time, showing that prices for food and other necessities were slightly higher than their average prices last month.

  “Commodity prices continued to drop compared with last year because of a poor economic climate, though the price of fruits and vegetables has remained stable,” DGBAS section chief Wu Chao-ming (吳昭明) told a media briefing.

  

  A woman shops at a local supermarket yesterday. Price indexes for last month released yesterday by the Directorate-General of Budget, Accounting and Statistics showed that the Consumer Price Index for living necessities in Category A dropped by 1.23 percent from the previous month. Category A includes prices of food, water, electricity and gas.

  PHOTO: CNA

  This was the eighth straight month the headline inflationary gauge contracted as the recession slowed economic activity and retailers lowered prices to boost consumption, the latest CPI data showed.

  Transportation prices reported the biggest fall, at 4.03 percent, as energy costs remained relatively high in September last year after crude oil hit US$147 a barrel in July last year. Wu said the swine flu pandemic contributed to shrinking transportation costs as people cut down on travel.

  Household living costs saw a 1.93 percent decline, mostly on lower utility rates compared with last year, while entertainment and education costs dropped 2.79 percent on price cuts by retailers, the report said.

  The core CPI, used to forecast long-term inflation trends by excluding energy, vegetable and volatile-priced commodities, dropped 0.93 percent, the fourth monthly contraction, the report said.

  The figure is likely to stay in negative territory for the rest of the year, although GDP is expected to regain positive cyclical movements this quarter on improving economic signs.

  The wholesale price index declined 9.59 percent year-on-year last month as global prices for metals, chemical and oil products dropped, the report showed.

  Meanwhile, the DGBAS released its first living cost indexes in line with Premier Wu Den-yih’s (吳敦義) concept of a grassroots economy.

  The first category index, under which food costs carry a weight of 80 percent, stood at 109.12 points last month.

  This was higher than the CPI index of 104.24 points, although it dropped 0.55 percent from last year, the report said.

  The second category index, which combines food costs with education and entertainment prices, reached 106.39 points and dipped a yearly 1.26 percent, the report said.

  The third category, comprised of 239 commodity items usually purchased once a quarter or sensitive to price fluctuations, retreated 0.72 percent annually to 107.08 points, the report said.

  The statistics official said the living cost indexes could establish better links between commodity data and the daily life of the common people, who may not buy certain goods and services despite price cuts.

  Separately, major domestic hypermarket chains Carrefour Taiwan (家樂福), Far Eastern Geant Co (愛買) and Wellcome Supermarket (頂好超市) said vegetable and fruit prices remained virtually unchanged as of yesterday, with many customers going grocery shopping prior to the weekend’s Moon Festival.

  The Council of Agriculture said in a press statement yesterday that heavy rain in northeastern Taiwan brought by Tropical Storm Parma had had a limited impact on vegetable and fruit supplies as most farmland is located in the south.
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