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