TYPHOON EFFECT:As food costs account for 25% of CPI makeup, households with lower incomes were hardest hit, as they spend a higher proportion of available funds on food

Taipei Times
Date: Dec 07, 2016
By: Crystal Hsu / Staff reporter

The consumer price index (CPI) gained 1.97 percent last month from a year earlier, the fastest rise in eight months, as vegetable and fruit prices remained high due to continued supply shortages caused by typhoons in September, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.

The increase in the headline inflationary gauge might not spur the central bank to raise interest rates later this month, as such a move could derail the economy’s fragile recovery, economists said.

“Of major consumer items, the food category posed the biggest increase of 6.42 percent as the effect of bad weather lingered, pushing fruit and vegetable costs up by 37.53 and 9.56 percent respectively,” DGBAS Deputy Director Tsai Yu-tai (蔡鈺泰) told a news conference.

Together, fruit and vegetable price hikes lifted CPI by 1.44 percentage points last month, more than offsetting the benefits of cheaper electricity and gas costs, Tsai said.    [FULL  STORY]