Taiwan: Consumer prices flat in February as spending dips after Lunar New Year holiday
March 7, 2017
In February, consumer prices in Taiwan fell 0.34% over the previous month, coming in below the 0.02% drop recorded in January. The price drop was driven by nursery care and entertainment expenses falling after the Lunar New Year holiday, while vegetable prices continued to slump. A slight rise in fruit prices moderated the monthly decline.
In annual terms, consumer prices were unchanged in February, which contrasted the 2.2% pick-up recorded in January and marked the lowest reading since August 2015. Because the Lunar New Year holiday fell in both January and February this year, rather than entirely in the month of February as it did in 2016, anomalous seasonality changes caused vegetable prices, along with prices for nursery care and entertainment, to plunge year-on-year in February. Meanwhile, annual average inflation dropped from 1.5% in January to 1.3% in February.
Core consumer prices, which exclude prices for electricity and fresh food, fell 0.43% from the previous month in February, contrasting the 0.66% increase in January. Core inflation fell to 0.2% in February from January’s 1.6% and recorded the lowest reading in three years.
Author: Christopher Thomas, Economist