Taiwan CPI inflation bottoms out

Taiwan's food CPI inflation is expected to have risen by a strong 2.3% mom in August after a slight decline in July. This is mainly because vegetable and fruit prices likely surged in August owing to Typhoon Soudelor, the most destructive tropical cyclone so far in 2015. 

However, crude oil prices declined sharply over August. Accordingly, retail fuel prices reduced by nearly 6% mom. Therefore, transportation CPI is expected to have dropped by 1.1% mom, offsetting part of the strength in food prices. 

"Headline CPI inflation is likely to have risen fractionally to -0.6% yoy in August from -0.7% yoy in July. Meanwhile, core CPI inflation is expected to have remained stable at 0.7% yoy given that inflationary pressures in other categories remained largely unchanged", says Societe Generale.