Taiwan’s CPI inflation likely to have accelerated in July on higher vegetable prices

Taiwan’s headline consumer price index is likely to have risen in July. In the previous month, the country’s CPI inflation had decelerated to 0.9 percent year-on-year from May’s 1.2 percent year-on-year.

The slowdown in June was mainly because of easing of food price inflation. But vegetable prices are likely to have risen sharply again in July ahead of Typhoon Nepartak.

Therefore, food CPI inflation is expected to have recovered by 1.1 percent month-on-month in July, with the annual rate firming to a tad above 6 percent from 4.5 percent in June, stated Societe Generale in a research report. This is expected to have pushed the headline CPI inflation up by 0.4 percentage points.

In the meantime, underlying inflationary pressures are likely to have remained weak. In the previous month, core inflation had eased a bit to 0.8 percent year-on-year from 0.9 percent recorded in May. In the month of July, core inflation is expected to remain slightly below 1 percent in the remainder of 2016, added Societe Generale.