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Taiwan consumer inflation in June reaches a nearly 14-year high

Image: Reuters Berita 24 English -  The consumer price index (CPI) , which exceeded market estimates by rising 3.59 percent from a year earl...


Image: Reuters

Berita 24 English -  The consumer price index (CPI), which exceeded market estimates by rising 3.59 percent from a year earlier, helped Taiwan's inflation rate reach a nearly 14-year high in June.

The Directorate General of Budget, Accounting and Statistics said in a statement on Wednesday that the rate had accelerated from the 3.39 percent year-over-year estimate for May. It was also slightly below economists' forecasts of a 3.5 percent growth in a Reuters poll.

It was the biggest monthly result since CPI increased 4.68 percent in August 2008 and will probably increase pressure to boost interest rates even further.

A more accurate indicator of underlying pricing pressures, the core CPI, increased 2.77 percent year over year from 2.60 percent in May. It doesn't include the more erratic pricing for electricity, produce, or fruits.

In June, Taiwan's central bank increased its policy rate for the second time this year in response to worries about escalating inflation. It also downgraded the island's trade-dependent economy's growth projection for 2022.

In the second half of the year, analysts had anticipated one or two more gradual rate increases.

However, price pressures are still far lower than in the US and EU, and Taiwan's export-driven economy has benefited from a global scarcity of semiconductors that has filled order books at Taiwanese chip manufacturers.

On Tuesday, South Korea said that its inflation rate in June had increased by 6.0 percent over a year earlier, which was the highest level since November 1998 and a 24-year high.

The government cites Taiwan's leading semiconductor industry as evidence that, despite the stock market's decline, the country's economic fundamentals are still strong.

Infineon of Germany and Qualcomm Inc. are among the clients of chipmaker United Microelectronics Corp., which earlier on Wednesday reported June revenues that were up 43.2 percent year over year and up 38.2 percent year over year.

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