FOOD uncertainty: The minimum wage increase is to have a minimal impact on consumer prices due to slow GDP growth and subdued inflation, the lender said

Taipei Times
Date: Mar 06, 2019
By: Kao Shih-ching  /  Staff reporter

Given strong deflation momentum, DBS Bank Ltd (星展銀行) yesterday trimmed its consumer price index (CPI) forecast from 1 percent to 0.7 percent for this year, but said that the uncertainties would come mainly from volatile food components.

Inflation is easing faster than expected in Taiwan, as headline inflation dropped to 0.2 percent in January, down from 0.5 percent last quarter and 1.7 percent in the third quarter of last year, the Singapore-based lender said in a report.

Oil prices have started to rebound thanks to a recovery in global risk appetite, China’s policy stimulus and optimism regarding US-China trade talks, the bank said, adding that they might rise in the coming months, given that OPEC members have started to cut production and the US’ waiver on sanctions on Iran is to expire at the end of next month.

Brent crude oil prices would drop to about US$65 per barrel on average in the first half of this year, but advance to between US$70 and US$75 in the second half, driving full-year energy inflation growth toward zero, the bank said.    [FULL  STORY]