Taipei: Taiwan's consumer price index (CPI) growth in May exceeded the 2 percent alert level set by the central bank. The rise is attributed primarily to a spike in crude oil prices, which has been influenced by ongoing military conflicts in the Middle East, as reported by the Directorate General of Budget, Accounting and Statistics (DGBAS).
According to Focus Taiwan, data from the DGBAS indicated that the local CPI increased by 2.20 percent compared to the previous year in May, following a 1.73 percent rise in April. This marks the first instance of local inflation surpassing 2 percent since April 2025, when the CPI climbed to 2.03 percent. The core CPI, excluding fruit, vegetables, and energy, also rose by 2.12 percent year-on-year in May, surpassing the 2 percent alert level.
During the first five months of the year, Taiwan's CPI rose by 1.52 percent from the previous year, with the core CPI increasing by 1.96 percent. The DGBAS noted that communications and transportation prices surged by 4.00 percent year-on-year in May, driven by a 20.09 percent increase in fuel prices-the highest growth in four and a half years. Air ticket prices also saw a significant rise of 10.37 percent due to increased fuel surcharges.
Additionally, education and entertainment expenditures grew by 3.03 percent year-on-year, with tour group fares rising by 3.68 percent. Food prices saw an increase of 1.36 percent, with dining-out expenses up by 2.99 percent, and prices of vegetables, eggs, and fishery items climbing by 9.69 percent, 7.87 percent, and 4.05 percent, respectively.
DGBAS senior executive officer Tsao Chih-hung explained that the increase in vegetable and fuel prices, along with tour group expenses and plane tickets, contributed to a 0.4 percentage point rise in May's CPI growth. Tsao mentioned that air fuel surcharges would be reduced from June 7, which is expected to moderate the growth in air ticket prices.
The producer price index (PPI) also rose by 14.11 percent year-on-year in May, largely due to the increased costs of crude, coal-related items, chemical materials, drugs, computers, and electronics and optoelectronics products. Strong demand for AI contributed to the rise in electronics prices.
The import price index surged by 22.33 percent in Taiwan dollar terms and 17.21 percent in U.S. dollar terms in May, while the export price index increased by 23.25 percent in Taiwan dollar terms and 18.09 percent in U.S. dollar terms. In the first five months of the year, the PPI rose by 4.90 percent year-on-year.
Tsao emphasized that local CPI growth has remained mild without signs of import inflation, but he cautioned that the index could rise above 2 percent in June due to a relatively low comparison base from the previous year.