Taipei: Taiwan’s consumer price index (CPI) rose 1.25 percent year-on-year in September, marking the lowest increase in four and a half years. This is the fifth consecutive month where the inflation rate has remained below the 2 percent alert level, according to the Directorate-General of Budget, Accounting and Statistics (DGBAS).

According to Focus Taiwan, core CPI, which excludes fruit, vegetables, and energy, climbed 1.46 percent, reaching a seven-month low. DGBAS specialist Tsao Chih-hung identified several factors contributing to the moderation in inflation, including stable weather since mid-August which facilitated vegetable production recovery, tax cuts, and aggressive promotions for new cars that reduced transport costs. Additionally, a higher base effect was noted as last year’s Mid-Autumn Festival occurred in September.

Tsao highlighted that Typhoon Ragasa had a limited impact on agriculture, which helped keep price growth low. However, despite the overall slowdown, the prices of key household essentials rose 2.47 percent year-on-year, the fastest pace in over 18 months. This increase was primarily driven by pork prices, which surged 8.74 percent, and eggs, which increased 5.94 percent due to seasonal and base effects.

The specialist noted that pork prices spiked temporarily around the Ghost Festival on September 6 but eased later in the month. Addressing public concerns about electricity price hikes effective in October, Tsao mentioned that the adjustment will have a minimal impact, raising this year’s CPI by 0.01 percentage points and next year’s by 0.04 points. Residential users will mainly be affected, while small businesses will see costs rise by approximately NT$70 (US$2.29) per month.

Looking ahead to October, Tsao suggested that stable weather could offset the electricity increase, keeping CPI growth similar to September. He further added that international commodity prices, including relatively low crude oil and decreasing import prices, are expected to help contain domestic production costs and maintain price stability.