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
Semiconductor business between Taiwan and the US is a “win-win” model for both sides given the high level of complementarity, the government said yesterday responding to tariff threats from US President Donald Trump. Home to the world’s largest contract chipmaker, Taiwan Semiconductor Manufacturing Co (TSMC, 台積電), Taiwan is a key link in the global technology supply chain for companies such as Apple Inc and Nvidia Corp. Trump said on Monday he plans to impose tariffs on imported chips, pharmaceuticals and steel in an effort to get the producers to make them in the US. “Taiwan and the US semiconductor and other technology industries
SMALL AND EFFICIENT: The Chinese AI app’s initial success has spurred worries in the US that its tech giants’ massive AI spending needs re-evaluation, a market strategist said Chinese artificial intelligence (AI) start-up DeepSeek’s (深度求索) eponymous AI assistant rocketed to the top of Apple Inc’s iPhone download charts, stirring doubts in Silicon Valley about the strength of the US’ technological dominance. The app’s underlying AI model is widely seen as competitive with OpenAI and Meta Platforms Inc’s latest. Its claim that it cost much less to train and develop triggered share moves across Asia’s supply chain. Chinese tech firms linked to DeepSeek, such as Iflytek Co (科大訊飛), surged yesterday, while chipmaking tool makers like Advantest Corp slumped on the potential threat to demand for Nvidia Corp’s AI accelerators. US stock
The US Federal Reserve is expected to announce a pause in rate cuts on Wednesday, as policymakers look to continue tackling inflation under close and vocal scrutiny from US President Donald Trump. The Fed cut its key lending rate by a full percentage point in the final four months of last year and indicated it would move more cautiously going forward amid an uptick in inflation away from its long-term target of 2 percent. “I think they will do nothing, and I think they should do nothing,” Federal Reserve Bank of St Louis former president Jim Bullard said. “I think the
Cryptocurrencies gave a lukewarm reception to US President Donald Trump’s first policy moves on digital assets, notching small gains after he commissioned a report on regulation and a crypto reserve. Bitcoin has been broadly steady since Trump took office on Monday and was trading at about US$105,000 yesterday as some of the euphoria around a hoped-for revolution in cryptocurrency regulation ebbed. Smaller cryptocurrency ether has likewise had a fairly steady week, although was up 5 percent in the Asia day to US$3,420. Bitcoin had been one of the most spectacular “Trump trades” in financial markets, gaining 50 percent to break above US$100,000 and
RSS