Taiwan's consumer price index fell again in November: DGBAS

Taipei, Dec. 9, 2003 (CENS)--Due to the continued falls in house rental and in prices for computers and home appliances, Taiwan's consumer product index (CPI) slipped 0.45% annually in November, representing a fall for the sixth consecutive month, according to statistics compiled by the Cabinet-level Directorate general of Budget, Accounting and Statistics (DGBAS)

DGBAS warned of a deflationary pressure as the index is expected to continue to fall in December.

Chen Chang-hsiung, director of DGBAS's third bureau, said deflationary pressure still exists because of the continued fall in the CPI. But Chen also noted the deflationary pressure would be eased as the global economy is on the recovery track according to projections made by some leading economic forecast institutions.

A DGBAS official said rentals have been falling for the past 28 months since August 2001 and the prices of durable consumer products have been slipping since June 1996 with the index falling 2.77% annually in November. DGBAS attributed the falls in durable consumer products and rentals to the cost cuts due to the global division of labor.

Besides the global division of labor, another factor causing the continued fall in CPI is the low-level private consumption growth. DGBAS anticipated the private consumption index would edged up 0.8% annually this year, far lower than the average 5% registered in the past several years.

A DGBAS official said Japan saw a flat CPI in October after experiencing continued falls for 49 months in a row. Nevertheless, whether Japan has got out of the deflationary threat remains to be observed further.