Taiwan CPI Up As Reserves Have Fallen Over The Last Month

The Taiwan annual consumer price index, or CPI, grew beyond the rate of analyst predictions over August, according to official figures released today.

The figures released by the Directorate General of Budget, Accounting and Statistics showed an increase in the CPI of 1.59% over the course of August. Despite last month’s drop in CPI of 0.34%, the rise has come as a surprise to analysts, who had predicted a much lower increase of just 0.8%.

Taking into account seasonal adjustments, the consumer price index increased by 0.31% to 106.40 through August, compared to growth of just 0.26% through July.

The consumer price index is generally considered to be a good indicator of national inflation, taking into account the difference in price of a basket of cross-sect consumer goods over a given period.

The Taiwan economy has been experiencing substantial growth, and has been performing well for a number of years. As such, it was ranked top of a recent survey into living standards conducted by the Asia Development Bank, alongside Hong Kong and Singapore.

With the government considering reducing levels of corporation tax, the economy could be in for even further growth, subsequently leading to increased inflationary pressures which could further boost the CPI figure.

In other news today, the Taiwan government announced foreign reserves had fallen by almost $5 billion over the last month, amounting to a revised total of $261.37 billion. Analysts have attributed the fall in reserves to increasing foreign investment in business and company securities.

With the world financial markets in turmoil, and the credit environment tightening, Taiwan may benefit from a global slowdown in their bid to maintain inflation. However, this could have an adverse effect on growth, which could ultimately result in further market instability.

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