TAIPEI (Taiwan News) — Taiwan’s consumer inflation slowed to its lowest level in five years in January, with the Consumer Price Index rising 0.69% year-on-year, according to data released Thursday by the Directorate General of Budget, Accounting and Statistics.

The January increase was sharply lower than December’s 1.3% rise, largely due to a base effect stemming from the Lunar New Year falling in January last year, the agency said. Core CPI, which excludes fruits, vegetables, and energy, rose 1.24%, per CNA.

Directorate General of Budget, Accounting and Statistics Senior Executive Officer Tsao Chih-hung (曹志弘) said prices typically rise ahead of the Lunar New Year due to higher service costs and increased gift-giving. However, even after excluding holiday-related service price effects, January’s CPI increase remained below 1.5%, indicating overall price stability.

Among items closely tied to daily living, prices for essential consumer goods rose 3.12% year-on-year, the largest increase in nearly two years. Egg prices surged 18.31%, marking the steepest rise in 33 months. Tsao attributed the spike to a base effect, as egg prices had fallen more than 20% during the same period last year.

Dining-out costs increased 3.08% from a year earlier. While this marked the 15th consecutive month of increases above 3%, Tsao said the pace of growth has slowed.

Tsao added that the domestic producer price index has posted negative growth for 10 straight months, indicating stable upstream prices. This has helped offset manufacturers’ costs for raw materials and intermediate inputs, easing pressure on restaurant prices alongside stable commodity costs.

Rent inflation also showed signs of easing. Tsao said the year-on-year increase in rents fell below 2% in January to 1.99%, the first time in two-and-a-half years. The rate of increase had already been converging gradually each quarter last year, he added.

Looking ahead, Tsao said price fluctuations are typically larger in January and February due to the Lunar New Year. February’s CPI growth is expected to exceed January’s, but the average increase for the first two months of the year is forecast to remain below 1.5%, pointing to continued price stability.