COST OF LIVING/Taiwan’s 2022 CPI growth hits 14-year high

Taiwan's Consumer Price Index (CPI) grew at its fastest pace in 14 years in 2022 because of increases in the prices of food, rent and fuel, the Directorate General of Budget, Accounting and Statistics (DGBAS) said Friday.

The CPI rose 2.95 percent from a year earlier in 2022, the highest since 2008, when it rose 3.52 percent, according to DGBAS data.

The inflation figure for 2022 was nearly identical to the 2.94 percent forecast by the DGBAS in late November 2022, but still topped the 2 percent alert level set by Taiwan's central bank.

Tsao Chih-hung (???), a DGBAS specialist, said Taiwan's inflation was mainly the result of higher food prices, caused in part by the Russian invasion of Ukraine on Feb. 24, which drove the prices of agricultural and industrial raw materials higher worldwide.

In Taiwan, Tsao said, food prices were up 5.66 percent in 2022 because of more expensive commodities, and as they accounted for 24.8 percent of Taiwan's CPI model, their rise contributed 1.39 percentage points alone to the 2022 increase in the CPI.

Dining out costs rose 5.77 percent, the highest level since 2008, when they were up 7.46 percent.

Tsao said a 1.68 percent increase in rent also contributed to the rise in the CPI, driven by a 5.82 percent increase in home maintenance costs that led landlords to raise rents.

The increase in maintenance expenses was the highest since hitting 6.36 percent in 1995, he said.

According to the DGBAS, rents accounted for 15.2 percent of the CPI model in 2022.

Fuel costs, which made up 8.41 percent of the CPI model, also contributed to overall inflation, rising 2.40 percent last year, Tsao said.

A better indicator of the impact of inflation on the general public may have been the rise in the cost of a basket of 17 government-monitored household necessities, including rice, pork, bread, eggs, sugar, cooking oil, instant noodles, shampoo and toilet paper, Tsao said.

The cost of that basket rose 5.02 percent in 2022 after a 2.44 percent increase in 2021, outpacing the general CPI.

The core CPI, which excludes the price of vegetables, fruits and energy, rose 2.60 percent from a year earlier, according to the DGBAS.

In December alone, Taiwan's CPI grew 2.71 percent from a year earlier, with core CPI also rising 2.71 percent, the DGBAS said, citing higher food prices, rents, fuel costs and entertainment expenses.

On a month-on-month basis, the December CPI rose 0.16 percent, and after seasonal adjustments, the index also grew 0.33 percent, the DGBAS said.

During the month, food prices rose 4.93 percent, pushed higher by 19.92 percent, 5.63 percent, and 11.98 percent rises in the prices of eggs, meat and vegetables, respectively, while dining out costs rose 5.43 percent, DGBAS data showed.

Rents rose 2.22 percent year-on-year in December, while entertainment and fuel costs were 6.20 percent and 5.42 percent higher, respectively, than a year earlier, DGBAS data showed.

Meanwhile, the wholesale price index (WPI) rose 12.43 percent in 2022 from a year earlier, according to the DGBAS.

Looking ahead, Tsao said the CPI will likely rise in January, especially with the arrival of the Lunar New Year holiday, but its rise should moderate further into the year.

The DGBAS has forecast the CPI will grow 1.86 percent in 2023.

Source: Focus Taiwan News Channel