The consumer price index (CPI) last month rose 1.75 percent from a year earlier, as entertainment costs remained stubbornly high, but food prices stabilized, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.
It is the first time in 23 months that headline inflation fell below the central bank’s 2 percent target, but the core CPI accelerated to 2.61 percent after excluding volatile items, such as fruit and vegetables, the statistics agency said.
“Sufficient fruit and vegetable supply allowed their prices to fall and tame the increase in food costs to 1.38 percent,” DGBAS official Tsao Chih-hung (曹志弘) said, adding that fruit and vegetable prices fell 17.89 percent and 7.51 percent from their year-ago levels respectively, thanks to good weather.
Photo: CNA
The inflation gauge would exceed 2 percent in the absence of cheaper fruit and vegetables, which weighed on the CPI by 0.59 percentage points, the official said.
A high comparison base last year also helped push the CPI below 2 percent, Tsao said.
The CPI in June last year was 3.59 percent, due to rising energy prices, among other factors.
The inflationary readings would likely advance at a similar pace this month and beyond, as oil and raw material prices have softened globally due to tepid demand, Tsao said.
The producer price index (PPI), which measures price changes from a seller’s perspective, contracted 4.84 percent, deeper than the 3.9 percent in May, as firms cut selling prices to cope with sluggish business, the DGBAS said.
Education and entertainment grew 3.48 percent, replacing food costs as the main CPI driver, as leisure service providers raised charges by 7.56 percent, helped by strong demand, the agency said.
“People who go on holiday and eat out could feel the evident price changes,” Tsao said.
Price hikes by service sectors tend to be sticky and irreversible, a reason for the core CPI to be consistently higher than headline values.
The prices of miscellaneous items increased 2.76 percent year-on-year to reflect higher caregiver charges, and more expensive jewelry and cosmetic products, it said.
Sheltering costs rose 2 percent, it said.
In the first six months of this year, the CPI advanced 2.32 percent, while the PPI declined 0.37 percent, the agency said.
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