Taiwan: Inflation bucks downward trend in December
January 6, 2013
In December, consumer prices added 0.25% over the previous month, which contrasted the 0.76% price drop recorded in November. The monthly rise was mostly the result of higher prices for vegetables, which soared 18.26% over November, offsetting lower prices for fruits as well as for clothing.
Annual headline inflation remained unchanged at 1.6%, which surprised the market on the upside, as analysts expected inflation to ease to 1.4%. Meanwhile, the core inflation index, which excludes volatile categories such as fresh food and energy, was virtually unchanged over the previous month (-0.02% month-on-month). Nevertheless, annual core inflation inched up from 1.0% in November to 1.1% in December.
Overall, inflation averaged 1.9% in 2012, which came in above the 1.4% tallied in 2011 but was in line with government's objective of keeping inflation at below 2%. Against this backdrop of relatively moderate inflation, at its latest policy meeting on 19 December, the Central Bank left the discount rate unchanged at 1.875%.