The Directorate-General of Budget, Accounting and Statistics last week raised its growth forecast for the nation’s consumer price index this year to 2.03 percent, factoring in an average 11 percent increase in electricity rates from this month. The new forecast followed the central bank’s upgrading of its inflation estimate to 2.16 percent from 1.89 percent in light of the government’s across-the-board electricity rate increases.
As a result, consumer price index growth would exceed 2 percent for three consecutive years after inflation grew 2.95 percent in 2022 and 2.49 percent last year — a rarely seen phenomenon over the past 30 years. Central bank Governor Yang Chin-long (楊金龍) had mentioned several times that inflation might undergo a structural upward shift, with the long-term average inflation at about 1.5 to 2 percent compared with about 1 percent in the past, due to factors such as a green energy transition, industrial transformation and labor shortages.
As consumer prices are tilted toward the high side, most wage earners are under growing pressure from a substantial increase in their living expenses. A recent survey by online job bank yes123 on the financial health of workers aged 39 and younger showed that 37 percent of those surveyed said their finances were balanced and 23.4 percent considered their income sufficient to cover expenses, while nearly 40 percent said they were unable to make ends meet every month. The survey indicated a worsening trend for young workers, as 38.1 percent of people last year said they did not have enough income to cover their monthly expenses, up from 36.3 percent a year earlier.
Meanwhile, about 73.3 percent of young workers are in debt, the survey found, with mortgages, student credit card debt, and bank and auto loans. Some are in debt as a result of supporting family or friends, or from investment losses or business failures. On average, young workers said they could live off their savings for up to two-and-a-half months should they unexpectedly lose their job, but 34.6 percent said they could barely survive one to two days if unemployed.
Despite the end of the COVID-19 pandemic, countries are still feeling the effects of higher inflation due to Russia’s invasion of Ukraine, with people facing rising food, rent and electricity costs. While the monthly minimum wage in Taiwan has increased from NT$20,008 to NT$27,470 over the past eight years, young workers are still struggling to save money while maintaining the quality of life their jobs afford.
Meanwhile, this year’s World Happiness Report released on March 20 shows that Taiwan remains Asia’s second-happiest country after Singapore, although its global ranking fell to 31st from 25th last year. Taiwanese aged 30 and younger are the 25th-happiest in the world and the most happy in East Asia, surpassing that of many advanced countries, including the UK at 32nd, Germany at 47th, France at 48th, South Korea at 52nd, Singapore at 54th, Canada at 58th, the US at 62nd and Japan at 73th, the annual UN-backed report showed.
Numbers aside, do Taiwanese youth experience the same level of happiness as suggested in the UN report, given that inflation continues to take a large bite out of their wages? After all, Taiwan should not be complacent about the report’s high ranking, as the rallies of local equities and GDP growth do not translate into an increase in people’s happiness. Conversely, there is much to think about as to why older adults in Taiwan ranked lower at 34th in Asia, behind Singapore at 26th and even China at 30th.
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