Taiwan Inflation


Taiwan: Consumer prices record largest drop in over five-years on low oil prices

February 5, 2015

Consumer prices in January decreased 1.24% over the previous month, which followed December’s 0.35% fall. According to the Directorate-General of Budget, Accounting & Statisics (DGBAS), the reading mainly reflected significant drops in the prices for fuels and lubricants, as well as for water, electricity and gas. The large drops registered in these categories resulted from lower global oil prices and a rebate given by the Taiwan Power Company to over 11.7 million households and businesses in January.

Annual consumer prices swung from a 0.6% rise in December to a 0.9% decrease in January, which marked the largest fall since November 2009. The decrease was unexpected as market analysts had predicted a gain of 0.3%. As a result, annual average inflation fell from December’s 1.2% to 1.1%.

Core consumer prices, which strip out prices for electricity and fresh food, fell 0.03% in January over the previous month, which followed December’s 0.06% drop. Annual core inflation fell from December’s 1.4% to 0.6%, which marked the lowest reading in almost one-year.

The government expects inflation to average 0.91% in 2015. FocusEconomics Consensus Forecast panelists expect inflation to average 1.4% in 2015, which is down 0.3 percentage points from last month’s forecast. For 2016, the panel sees inflation increasing to 1.6%.

Author: Angela Bouzanis, Senior Economist

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Taiwan Inflation Chart

Taiwan Inflation January 2015

Note: Month-on-month and year-on-year changes of consumer price index (CPI) in %.
Source: Directorate-General of Budget, Accounting & Statistics (DGBAS).

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