Taiwan: Inflation inches up in September
October 5, 2011
In September, consumer prices rose 0.11% over the previous month, following a virtually flat reading in August. The monthly rise reflected higher prices for food during the Mid-Autumn Festival and for housing. Annual headline inflation inched up from 1.3% in August to 1.4% in September, which was broadly in line with market expectations. The core inflation index, which excludes volatile categories such as fresh food and energy, decreased 0.07% over the previous month. As a result, annual core inflation eased from 1.3% in August to 1.2% in September. In addition, annual average headline inflation remained unchanged at Augusts' 1.3% rate. Meanwhile, at its 29 September quarterly policy meeting, the Central Bank left the discount rate unchanged at 1.875%, in a move widely expected by market analysts. The Bank's decision follows five consecutive rate hikes of 12.5 basis points at each quarterly meeting since June 2010. The Bank cited cited lower inflationary expectations, slower exports and weaker industrial output growth due to a weakening global economic outlook as key determining factors. The government recently trimmed its forecast for the full-year CPI increase from 1.9% to 1.6%.