The consumer price index (CPI) last month declined 0.52 percent from a year earlier, as cheaper oil products continued to push down transportation costs and businesses cut prices to stimulate sales, a report released yesterday by the Directorate-General of Budget, Accounting and Statistics (DGBAS) said.
It is the sixth consecutive month that the inflationary gauge posted a retreat, but the agency dismissed concerns over deflation, saying that the pace of contraction is slower than June’s revised 0.77 percent decline.
“International oil prices have stabilized and might gain considerable traction moving forward as demand picks up,” DGBAS Senior Executive Officer Chiou Shwu-chwen (邱淑純) told a media briefing in Taipei.
The purchasing managers’ index (PMI) for US manufacturers last month improved further from 52.6 to 54.2, which would help fuel consumption, Chiou said.
PMI values above 50 suggest an expansion, while readings below the threshold indicate a contraction.
Transportation and communications costs last month fell 5.09 percent, as international oil prices dropped 18.41 percent from a year earlier, while telecommunication charges fell 3.26 percent, the report said.
Education and entertainment costs fell 1.94 percent, as hotels cut room rates by 12.04 percent, and theme parks and other entertainment venues lowered admission rates by 17.96 percent to attract customers, it said.
Their strategy seems to have paid off, as visits to tourist attractions and shopping activity spiked, backed by the government’s Triple Stimulus Vouchers, Chiou said.
Clothing prices increased 1.57 percent as retailers offered fewer discounts on summer garments, while miscellaneous items increased 1.34 percent as jewelry and accessories grew more expensive, the report said.
Health and medical expenses rose 0.86 percent to reflect upward adjustments in registration fees and copayments, it said.
Food costs inched up 0.78 percent, as higher fruit prices canceled out lower vegetable prices, it said.
Core CPI — a more reliable long-term tracker of consumer prices because it excludes volatile items such as vegetables, fruits and energy — posted a 0.14 percent increase, affirming stable prices, Chiou said.
The wholesale price index (WPI), a measure of production costs, shrank 9.15 percent, narrowing from a revised 10.39 percent decline a month earlier, the agency said.
Export prices softened 3.86 percent in US dollar terms, while import prices shed 7.14 percent, favorable for a trade surplus, it said.
For the first seven months, the CPI edged down 0.27 percent, while the WPI fell 8.34 percent, it said.
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