Taiwan’s consumer price index (CPI) fell for the sixth consecutive month in June, dropping 0.56% year-on-year.
An official with the government statistics office, Tsai Yu-tai, said that Taiwan was not facing deflation pressure despite the drop. He said that’s because the “core CPI”, which excludes the prices of variable commodities like vegetables, fruit, and energy, has gone up. Tsai said overall commodity prices are stable.
“Oil, electricity, and gas will continue to affect [the CPI]. So we had expected a drop in the second quarter," said Tsai.
"But if you factor out these more variable items, the core commodity prices are still quite stable. The first quarter saw an increase of 1.12% in commodity prices. The same prices increased by 0.61% in the second quarter. We are still seeing a stable fluctuation in commodity prices. We wouldn’t say that there is deflation.”
The statistics office said that the reason the CPI dropped in June is because the average annual growth rate of oil prices has fallen more than 20% over the last seven months. That led to a drop of 0.87 percentage points in the CPI. However, that figure was offset by a rise in food prices.