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Taiwan Inflation February 2024

Taiwan: Inflation comes in at highest level since July 2022 in February

Inflation came in at 3.1% in February, up from January’s 1.8%. February’s result marked the highest inflation rate since July 2022. The acceleration was broad-based, with greater price pressures recorded for food, housing, and transportation. However, the timing of the Lunar New Year (LNY)—which fell in February this year compared to January in 2023—artificially boosted February’s inflation reading; the LNY leads to increased demand.

Annual average inflation remained at January’s 2.4% in February.

Lastly, consumer prices rose 0.63% in February over the previous month, picking up from January’s 0.01% rise. February’s figure marked the highest reading since September 2023.

On the reading and outlook, Nomura analysts said:

“As this year’s LNY holiday fell in February after being in January in 2023, data distortions likely exaggerated February’s inflation reading amid supply-side price pressures. Indeed, despite the sharp increase in inflation, it averaged 2.4% y-o-y for the first two months of the year, down from 2.9% y-o-y in Q4 2023, suggesting underlying trends continued to ease.[…] We expect near-term inflation to ease to around mid-2% after February’s spike, before returning to 2% by end-2024.”

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