The consumer price index (CPI) last month soared to a 19-month high of 3.08 percent from a year earlier, as food and services prices grew over the Lunar New Year holiday, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.
Stripping out the holiday effect, the inflationary gauge rose 2.43 percent in the first two months, slowing from 2.7 percent in December last year, DGBAS official Tsao Chih-hung (曹志弘) said, predicting that the CPI could lose some momentum this month.
“It is usual for caregivers, barbers and taxi drivers to charge extra fees in keeping with tradition before and through the holiday,” Tsao said, adding that hotels, restaurants, travel agencies and entertainment facilities did the same.
Photo: CNA
That explained why prices for miscellaneous items climbed 4.25 percent, as caregiving costs spiked 25.87 percent, while prices for jewelry and personal accessories advanced 4.46 percent, the DGBAS report showed.
For similar reasons, spending on education and entertainment was 3.72 percent higher year-on-year, it added. Hotels, restaurants and travel agencies raised charges to reflect strong demand and extra personnel compensation during the holiday.
Food costs, the largest chunk with 25 percent of the weighting, rose 4.49 percent, as fruit prices shot up 20.71 percent due to bad weather last year, Tsao said.
Meat prices gained 5.45 percent on the back of more expensive fodder, the report said, adding that dining prices climbed 4 percent.
Vegetable prices fell 8.62 percent as a harvest drove up supply and eased price hikes in overall food costs, Tsao said.
Core CPI, a more reliable long-term price tracker because it excludes volatile items, expanded 2.9 percent last month, the DGBAS said.
The reading in the first two months increased at a more tolerable 2.27 percent, it said.
Upcoming electricity rate hikes could pose uncertainty, but is hopefully controllable, Tsao said.
A 10 percent hike in electricity rates across the board might drive up inflation by 0.12 percentage points annually, he said, adding that it is difficult to measure indirect influences as some firms would pass the extra financial burden onto consumers, while others would absorb the costs themselves.
The Ministry of Economic Affairs yesterday downplayed the impact of higher electricity rates, saying that a 5 percent hike for residential electricity would lead to an increase of NT$9 per month for those consuming less than 120 kilowatts-per-hour (kWh) and an increase of NT$34 a month for those consuming up to 330kWh.
Taiwan’s residential electricity rates are the fifth-lowest in the world and the industrial electricity rates are the third-lowest, Minister of Economic Affairs Wang Mei-hua (王美花) told legislators yesterday.
Meanwhile, the producer price index (PPI), which captures price changes from a seller’s viewpoint, expanded 0.32 percent last month, but fell 0.12 percent in the first two months compared with a year earlier, the DGBAS said.
Tsao attributed the latest PPI movements to cheaper metal, but higher agricultural product prices, in addition to a soft local currency versus the greenback.
additional reporting by Lisa Wang
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