Taiwan’s inflationary pressures could ease in the next two quarters as international crude oil, grain and raw material prices show signs of stabilization, while the government said it would offer tariff breaks for cement manufacturers, the National Development Council said yesterday.
The council cited the US Energy Information Administration as saying that Brent oil prices should decline 1.5 percent in the fourth quarter from an average price of US$106.56 a barrel in the first half of this year.
The projection, if realized, would mitigate inflationary pressures on most consumer items, as Taiwan relies heavily on imported oil to drive industrial activity.
Photo: CNA
The council made the statement a day after the Directorate-General of Budget, Accounting and Statistics said the consumer price index (CPI) rose by 3.59 percent year-on-year last month, marking its highest level in 14 years.
The council said international grain prices are expected to fall in light of excellent harvests in producer countries.
The government has extended tariff waivers on imported crops to help keep their prices stable, it said.
Additionally, international raw material prices have entered corrections, explaining why utilization rates of domestic steelmakers hover at about 70 percent, the council said.
Regardless, the government is to ease cost burdens for cement makers by cutting tariffs on their materials by 50 percent, it said.
The government also said it would crack down on inventory hoarding or price gouging to demonstrate its determination to stabilize consumer prices.
The Cabinet yesterday also said it was closely monitoring the cost of goods, but insisted Taiwan’s economic fundamentals remain strong, one day after the government reported that inflation had hit a 14-year high.
The rise in consumer prices was largely being driven by global factors, such as the war in Ukraine and uncertainty surrounding the COVID-19 pandemic, Executive Yuan spokesman Lo Ping-cheng (羅秉成) said at a news conference.
However, the fundamentals of the national economy remain strong, Lo said, citing stable growth in exports and private consumption, as well as investment being projected to reach 26.82 percent of GDP this year.
While the government prefers to allow market forces to dictate price adjustments, it is monitoring the situation closely and would not hesitate to act against price gouging, hoarding or profiteering, Lo said.
The Ministry of Economic Affairs also yesterday said that it would extend a range of financial relief measures for businesses in industrial technology parks, as well as some restaurants and private preschools until the end of the year.
Separately, Taiwan Academy of Banking and Finance chairman Wu Chung-shu (吳中書) yesterday said that while inflationary pressures could push the global economy into a brief recession, the worst could be over by next year.
Wu said he expects the recovery to happen even sooner in Taiwan, where inflation has been milder and mostly tied to imported goods, possibly allowing for a return to a sub-3 percent CPI by the fourth quarter of this year.
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