TAIPEI : Taiwan’s inflation cooled slightly in July, with the consumer price index (CPI) expanding 3.36 per cent from a year earlier, and missed market expectations, providing some relief for central bank to raise interest rates.
The pace slowed marginally from a 3.59 per cent year-on-year reading for June, the highest in 14 years, the Directorate General of Budget, Accounting and Statistics said in a statement on Friday, but still above 3 per cent for five straight months.
In a Reuters poll of 20 economists, the CPI was likely to rise 3.51 per cent from a year earlier.
Core CPI, a better measure of underlying price pressures, rose 2.73 per cent from 2.77 per cent in June. It excludes more volatile energy, vegetable and fruit prices.
Taiwan’s central bank raised its policy rate in June for the second time this year, reflecting concerns about quickening inflation, and also trimmed the trade-reliant island’s growth outlook for 2022.
Analysts had expected one or two more modest rate hikes in the second half of the year.
Price pressures are still more moderate than in the United States and Europe, however, and Taiwan’s export-reliant economy has been supported by a global shortage of semiconductors that has filled Taiwanese chip-makers’ order books.
The government says Taiwan’s economic fundamentals remain sound, even as the stock market has faltered, pointing to its world-leading semiconductor industry.