Taiwan consumer inflation cools slightly in July

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TAIPEI: Inflation in Taiwan fell slightly in July, with the consumer price index (CPI) rising 3.36 percent from a year earlier, falling short of market expectations, providing some relief for the central bank to lower interest rates. to increase.

The pace slowed marginally from 3.59 percent year-on-year in June, its highest in 14 years, the Budget, Accounting and Statistics Directorate-General said in a statement on Friday, but still above 3 percent for five consecutive months. .

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In a Reuters poll of 20 economists, the CPI was likely to rise 3.51 percent from a year earlier.

Core CPI, a better measure of underlying price pressures, rose 2.73 percent from 2.77 percent in June. It excludes more volatile energy, fruit and vegetable prices.

Taiwan’s central bank raised its key rate in June for the second time this year, amid concerns about rising inflation, and also lowered the trade-dependent island’s growth prospects for 2022.

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Analysts had expected one or two more modest rate hikes in the second half of the year.

However, price pressures are still more moderate than in the United States and Europe, and Taiwan’s export-dependent economy is supported by a global semiconductor shortage that has filled the order books of Taiwanese chip makers.

The government says Taiwan’s economic fundamentals remain healthy even as the stock market is faltering, pointing to its world-leading semiconductor industry.

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