Taipei: Taiwan's inflation dipped to a low of 1.66 percent in 2025, marking the lowest annual figure in five years and the first time in four years it has fallen below a 2 percent alert set by the central bank, the Directorate General of Budget, Accounting and Statistics (DGBAS) said Wednesday.

According to Focus Taiwan, data compiled by the DGBAS showed the country's consumer price index (CPI) rose 1.66 percent in 2025, down from a 2.18 percent increase a year earlier. The 2025 figure was the lowest level since 2020, when the index contracted 0.23 percent, as COVID-19 pushed down crude oil and raw material prices.

The 2025 CPI growth also fell below the DGBAS's forecast of 1.67 percent. In December, the CPI rose 1.31 percent from a year earlier, largely due to higher food prices, rents, and fuel prices, with the core CPI-excluding vegetables, fruit, and energy-up 1.83 percent, the data indicated.

On a month-on-month basis, the CPI rose 0.07 percent, and after seasonal adjustments, the index grew 0.14 percent, according to the DGBAS. The DGBAS reported that food prices increased by 1.24 percent, with prices of meat, eggs, and grains-related items up 4.99 percent, 11.15 percent, and 2.69 percent in December, while dining out expenses also rose 3.27 percent.

Living costs rose 1.86 percent in December as rents grew 1.99 percent and fuel and electricity rates increased by 4.89 percent and 5.49 percent, respectively. It was the first time rent growth fell below 2 percent in about 30 months.

DGBAS Senior Executive Officer Tsao Chih-hung noted that dining out expenses rose above 3 percent for the 14th consecutive month, indicating that despite rent growth moderating, consumers might not perceive a significant decline in inflation.

Last month, the cost of a basket of 17 government-monitored household necessities, including rice, pork, bread, eggs, sugar, cooking oil, shampoo, and toilet paper, rose 2.57 percent, down from 2.76 percent in November, the DGBAS said. Meanwhile, the producer price index (PPI) fell 2.57 percent from a year earlier in December, largely due to a decline in the price of agricultural products, oil, coal, chemical materials, drugs, and electronics components.

In 2025, the PPI fell 1.84 percent year-on-year. Tsao mentioned that inflation is likely to slow further to below 1 percent in January due to a relatively high comparison base over the same period last year, when the Chinese New Year holiday occurred. This year, the holiday will fall in February. Tsao stated that the DGBAS will examine inflation during January-February together to exclude seasonal factors.