The Central Bank said in an online post that the recent rise in global prices is beginning to be felt around the world, as seen in Taiwan and emerging market economies such as Brazil, and by increasing inflation rates in advanced economies such as the US and the eurozone.
Inflation in Taiwan is relatively moderate at the moment, but as the nation moves into next year, many variables could affect whether Taiwan’s low prices are maintained.
The world is facing elevated coal and gas prices, which will affect the cost of domestic electricity generation. Over the past year, crude oil prices have risen 60 percent to the highest they have been in seven years.
Other commodity prices are also rising, and the chaos being felt in supply chains is placing upward pressure on the prices for many products.
The National Health Insurance fund is also at risk of bankruptcy, and Taiwanese can expect premiums to rise.
All of these factors will eventually be passed on to the consumer, and Taiwan is no exception.
The inflation figures might seem moderate, but for Taiwanese, inflation is a fact of life, and the cost of living, from food and clothing to rent and transport, has been going up.
Only a few days ago, Wowprime announced price increases for 15 brands that fall into this grouping in response to rising commodity prices. A trip to the supermarket also shows that Uni-President’s line of instant noodles has gone up by as much as 10 percent, as many well-known producers have decided to act first.
Other food products can only be expected to follow suit, with the bill for the increased prices going to the consumer.
Some people should not be hugely affected, with the minimum wage increasing next year and salaries for military personnel, public servants and public-school teachers being adjusted.
However, for at least 60 percent of salaried workers, whose salary levels have not changed in years and are unlikely to do so in the foreseeable future, the price increases will be felt, regardless of whether the Central Bank is insisting that the inflation rate will be moderate. Inflation is a kind of invisible tax that will affect workers’ lives and curtail their purchasing power, essentially hitting them with a salary cut. This is the most pernicious aspect of inflation.
The government must be aware of the suffering of ordinary Taiwanese, and address the structural problem of price increases, and the social injustice and sense of anxiety that it gives rise to.
Government ministries should monitor commodity price fluctuations and propose a stabilizing mechanism, while at the same time improving monitoring of hoarding and price speculation to avoid the most deleterious effects of inflation.
Wei Shih-chang is an information technology engineer.
Translated by Paul Cooper
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