Taiwan Inflation


Taiwan: Inflation slows in January

February 9, 2011

In January, consumer prices were virtually unchanged over the previous month, falling 0.01%, which followed the 0.74% price drop recorded in December. The subdued reading reflected falling prices for clothing (-4.85% month-on-month), which offset rising transport prices (+0.89% mom). Owing to the flat monthly figure, annual headline inflation inched down from 1.2% in December to 1.1% in January, contrasting market expectations that had inflation accelerating to 1.4%. Meanwhile, the core inflation index, which excludes volatile categories such as fresh food and energy, dropped 0.12% over the previous month. As a result, annual core inflation eased to 0.8% (December: 0.9%), while annual average headline inflation remained unchanged at December's 1.0%. The government expects inflation to average 1.85% in 2011.


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