Taiwan's statistics bureau announced Monday that with a 4.97 percent rise in the index in June, the second highest spike in 12 years, inflation in the second quarter rose 4.19 percent year-on-year, surpassing the bureau's projection of 3.98 percent.

Local think tanks said the latest figures will likely push their annual inflation projections higher, as commodity prices show signs of continuing their climb rather than declining.

“Our annual projection might need to be adjusted from 3.44 percent to 3.48 percent to match the new numbers, ”said Liang Kuo-yuan, the president of Polaris Research Institute, a private research unit.

Liang told the Central News Agency that a number of factors in the final two quarters of the year, including the onset of the typhoon season and higher international commodity and raw material prices, would likely keep inflation on an upward trend.

"Many local importers are finding it hard to eliminate inflationary pressures from skyrocketing international commodity prices,”Liang said.

The research institute had forecast that CPI would grow at a 4.03 percent rate for the second quarter, lower than the actual 4.19 percent figure recorded.

“Our forecasts for the third and fourth quarter are 3.91 percent and 2.29 percent, respectively, ”said Liang, adding that the two estimates are unlikely to be adjusted lower.

Another local think tank, the Chung-Hua Institution for Economic Research (CIER), also said it would raise its inflation forecast.

"CIER's annual CPI is set to rise, ”said Lee-rong Wang, director of the Center for Economic Forecasting under the research unit.

July's hike in electricity prices, to be followed by another round of increases in October, could prove to be a major factor in the index's rise, Wang told the Central News Agency.

The state-run Taiwan Power Company raised power rates by an average 12.6 percent in July, and it is scheduled to raise them by another 12.6 percent in October.

The CIER's previous inflation forecast for 2008 was 2.64 percent, with 1.74 percent in the first half of the year. In the first six months the index actually grew by 3.9 percent year-on-year, far higher than the research body expected.

Wang refused to speculate on how much the CIER would adjust its previous inflation forecasts, saying the unit was still figuring the impact of the new numbers.

In announcing June's CPI figures on Monday, the Directorate General of Budget, Accounting and Statistics refused to confirm whether the June numbers would prompt it to raise its annual inflation forecast of 3.29 percent made in May, as the it only projects annual inflation once every three months.