Wed, Aug 07, 2024 page12

• Gaemi damage to crops helps push up CPI

  ON TARGET: Inflationary pressures fell to healthy levels, with core CPI rising 1.84%, staying below the central bank’s 2% goal for the fifth straight month

  • By Crystal Hsu / Staff reporter
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  The consumer price index (CPI) last month grew 2.52 percent from a year earlier, the most in five months and up from 2.42 percent a month earlier, as Typhoon Gaemi destroyed fruit and vegetable crops, driving up prices, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.

  The disruption from Gaemi would become more evident this month, as it hit Taiwan the hardest on July 24 and 25 and crops would need several weeks to recover, DGBAS official Tsao Chih-hung (曹志弘) told a news conference in Taipei.

  Outside of the storm damage, inflationary pressures have subdued to healthy territory given the core CPI’s 1.84 percent increase, the fifth consecutive month below the central bank’s 2 percent target, Tsao said.

  

  People buy vegetables at a market in Taipei on July 27.

  Photo: Chen Yi-kuan, Taipei Times

  The core CPI is favored by the monetary policymaker as a more reliable indicator of long-term price movements because it excludes volatile items such as fruit, vegetable and energy costs.

  The headline CPI rose 0.19 percent from June, but the reading tapered to 0.09 percent after seasonal adjustments, affirming a stable price trajectory, the agency said.

  Heavy rainfall and storms underpinned a 4.57 percent hike in food costs, the largest chunk of CPI weighting, as fruit and vegetable prices soared 27.23 and 8.58 percent respectively from year-earlier levels, Tsao said, adding that eating out expenses rose 2.77 percent.

  However, the prices of eggs, a popular breakfast choice, slumped 16.27 percent due to abundant supply, he said.

  “People might feel the pinch more acutely as fruits and vegetables are frequently purchased items,” Tsao said.

  Costs for medicine and healthcare rose 3.24 percent as hospitals and clinics increased registration fees, as well as treatment and drug charges, to reflect higher personnel and operating costs, the DGBAS said.

  Medical facilities are facing labor shortages, with many increasing compensation in a bid to retain nurses and doctors.

  Shelter costs rose 2.31 percent, as landlords hiked rents to reflect more expensive electricity and home repair costs, the agency said.

  At the same time, education and entertainment prices rose 1.86 percent, as demand for KTV parlors and overseas tours has been robust this summer, it said.

  The producer price index (PPI), which measures the price movements of goods from a seller’s perspective, rose 3.74 percent from a year earlier, as bad weather increased agricultural prices, while computer, electronic and optical product vendors also raised prices, the DGBAS said.

  In the first seven months, the CPI increased an average of 2.3 percent, while the PPI expanded 1.72 percent, it said.
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