Bar­clays fore­casts rise in Tai­wan’s CPI in 2nd half

The China Post - - LOCAL -

Bri­tish bank­ing group Bar­clays pro­jected Thurs­day that Tai­wan’s con­sumer price in­dex (CPI) will start ris­ing again in the sec­ond half of the year partly on strong do­mes­tic de­mand.

Leong Wai Ho, a se­nior re­gional econ­o­mist with Bar­clays, said in a re­search note that as wage re­mains sta­ble in Tai­wan, con­sumer price growth may pick up again in the sec­ond half of the year af­ter a drop in the first half.

In the first quar­ter of the year, Tai­wan’s CPI fell 0.59 per­cent year-on-year. In March, the CPI dropped 0.61 per­cent year-onyear, fall­ing for the third con­sec­u­tive month in re­flec­tion of lower fuel costs that re­sulted from a plunge in in­ter­na­tional crude oil prices.

Leong said the CPI will con­tinue to fall over the next few months, as the state-owned Taipei Power Co. ( ) will re­duce elec­tric­ity rates by 7.34 per­cent from April 1.

How­ever, there are no de­fla­tion con­cerns as con­sumer prices in Tai­wan will rise again in the sec­ond half of the year, he said.

Leong’s out­look was in line with a state­ment is­sued Wed­nes­day by Tai­wan’s Di­rec­torate Gen­eral of Bud­get, Ac­count­ing and Statis­tics (DGBAS), which said there was no need to worry about de­fla­tion, as the core CPI showed a 1.12 per­cent in­crease in the first quar­ter, in­di­cat­ing sta­ble growth of Tai­wan’s con­sumer prices. The core CPI ex­cludes fruit, veg­eta­bles, and en­ergy.

Bar­clays nonethe­less cut its fore­cast for Tai­wan’s 2015 CPI growth from 1 per­cent to 0.3 per­cent.

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