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Taiwan 2022 inflation could rise above 4%

May consumer price index hits 10-year high, electricity price hike to have big impact

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Taiwan's inflation rate reached 3.39% in May, the highest level in 10 years. 

Taiwan's inflation rate reached 3.39% in May, the highest level in 10 years.  (CNA photo)

TAIPEI (Taiwan News) — The highest Consumer Price Index (CPI) rise in 10 years recorded for May could force the overall inflation rate for 2022 above 4%, reports said Friday (June 24).

Additionally, the war in Ukraine has forced international energy prices up and the government is considering hiking electricity rates, CTWant reported. The government’s Directorate General of Budget, Accounting and Statistics (DGBAS) said inflation in May reached 3.39%, the highest rate in a decade.

If electricity fees rose by 8%, inflation would increase by 0.1% as a direct result, but more expensive power is also likely to trigger price rises across the board, officials said. Economic growth, spending by families, and the cost of manufacturing would all be impacted by higher electricity rates, according to the report.

Since the war in Ukraine is unlikely to end soon, with food and energy prices still high as a result, this could continue to cause uncertainty and inflation in the second half of the year, analysts said.