On October 9th, Taiwan’s Directorate-General of Budget, Accounting and Statistics released data indicating that the year-on-year Consumer Price Index (CPI) growth for September stood at 1.82%. This marks the lowest rate in nearly eight months, falling below the inflation warning threshold for the first time in four months. Officials suggest that if weather conditions remain stable, Taiwan’s overall price situation should stabilize, making a future inflation rate of under 2% a likely scenario.
Caio Chih-Hung, a specialist from the Directorate-General, pointed out that three main factors contributed to the significant decline in inflation in September. First, the previous year’s high inflation was partially due to the severe damage caused by Typhoon Banyan, which inflated the baseline for comparison, resulting in moderated prices for fruits. Second, there has been a resurgence in vegetable production in Taiwan. Together, these two factors led to a 0.45 percentage point decrease in the overall CPI index from August. Additionally, prices for fuels, typically subject to short-term fluctuations, also dropped, allowing the inflation rate in September to return to single digits.
The statistics revealed that prices for food items such as fruits, cooking oils, and dining out have continued to rise, alongside increases in rents and registration fees. Meanwhile, costs related to electricity, entertainment services, parking, and vehicle maintenance have also gone up. However, a decline in prices for vegetables, eggs, and fuel has partially offset these increases.
When excluding fruits and vegetables, which rose by 1.59%, and adjusting for energy costs, the core CPI increased by 1.79%. This indicates that the price growth for goods has remained stable, with the core CPI staying around 1% for six consecutive months. For 17 key livelihood items monitored by the Executive Yuan’s price stabilization task force, the CPI for September experienced a slight annual decrease of 0.01%, maintaining a level below 1% for the past six months.
Looking ahead, Caio expressed that while an inflation rate below 2% is anticipated to be the norm, reaching levels of 1.5% or even the long-term average of 1.2% over the past decade may require more time.
In terms of expectations for the October CPI, Caio noted that last October’s Typhoon Prapiroon caused agricultural losses amounting to NT$540 million (approximately US$16.75 million). Meanwhile, recent damage from Typhoon Kanu has already approached NT$380 million as of October 9th. While the rising prices associated with these storm impacts are felt deeply by the public, projections suggest that October’s inflation rate should be similar to September’s, depending on the extent of the damage. However, attention should be paid to the possible increase in fuel prices due to escalating tensions in the Middle East, which could impact future pricing trends.
Additionally, statistics indicated that when excluding exchange rate fluctuations, September’s import prices decreased by 1.98% when measured in US dollars. This decline was primarily driven by the falling prices of mineral products, plant products, and chemical and related industrial goods. However, there was some price increase in basic metals and machinery, as well as in electrical and television equipment and their parts, partially offsetting the overall decrease.
