Data released by the Director-General of Budget, Accounting and Statistics (DGBAS) showed Monday that inflation accelerated to 2.46 percent in July from 1.77 percent in the preceding month. Inflation has now risen for five consecutive months.
Economists expected the index to rise 1.87 percent. The latest rate of inflation was the highest since September 2008, when the consumer price index rose 3.1 percent.
The annual core inflation was 0.96 percent. Food prices rose 6.27 percent annually, of which vegetables and fruit prices went up by 32.77 percent and 19.9 percent, respectively. The CPI, excluding fruits and vegetables, increased just 1.29 percent.
Taiwan's central bank kept its benchmark interest rate unchanged at 1.875 percent in June and said downside risks to global economic outlook remain high. The previous policy change was in July last year when the rate was slashed from 1.750 percent.
The DGBAS data in July showed that Taiwan's economy contracted 0.16 percent year-on-year in the second quarter of 2012 as debt worries in Europe dampened exports. This was the first decline in economic output since the third quarter of 2009.
The DGBAS, at the same time, lowered the growth forecast for the economy this year to 2.08 percent from the previously projected 3.03 percent.
The statistical agency in today's report said the CPI rose 0.38 percent month-on-month and the core index rose 0.1 percent. Taiwan's wholesale prices decreased 1.71 percent annually in July compared to expectations for a 1.5 percent fall. Month-on-month, the index dropped 0.08 percent.
The central bank still expects inflationary pressures to persist in the coming months. In the second half of the year, inflation in Taiwan will be driven mainly by weather-related factors, the bank said in its latest monetary policy review in June.
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