Taiwan’s core CPI to stabilise

Taiwan's CPI inflation is expected to inch higher from -0.7% yoy in May to -0.6% yoy in June, thanks to higher food price inflation. Daily price data suggested that vegetables, fruits and meat prices all increased over the month. Hence, food price inflation is expected to have risen further to 1.1% mom in June from 0.2% mom previously, raising headline inflation by 0.3pp. 

That said, a negative base effect from electricity bills and declines in fuel prices will probably offset part of the strength and drag the headline figure down by around 0.2pp. Meanwhile, increases in meat prices and depreciation of the Taiwanese dollar are expected to ease some weakness in the official core CPI inflation. 


"We expect the core CPI inflation to have stopped falling and remain unchanged at 0.6% yoy in June",says Societe Generale.