Taiwanese headline inflation likely to have eased in October

Taiwanese consumer price inflation is set to be released this week. According to a DBS Bank research report, the headline inflation is likely to have eased to 1.4 percent year-on-year in October from September’s 1.7 percent.

Prices of fresh food, housekeeping and some other services items should have come down after the Mid-Autumn Festival. In spite of the sharp rise in global oil prices, the inflationary effect on Taiwan should have been muted, as the state-owned Chinese Petroleum Corporation decided to freeze retail fuel prices for the Oct-Dec period. Inflation’s easing and the further rise in wage growth should underpin consumption and domestic demand.

“On the external front, the impact of the ongoing US-China trade war on Taiwan’s supply chain is not yet pronounced for the time being. October exports, due this week, are expected to show a steady growth of 5.3 percent (vs. 2.6 percent in Sep)”, added DBS Bank.