Taiwan central bank chief says inflation will be above 2% this year, but lower than 2023

TAIPEI (Reuters) – Taiwan’s consumer price index (CPI) and core CPI will be above 2% this year due to higher food prices and possible electricity price increases, but will still be lower than last year, the island’s central bank chief said on Tuesday.

“Even though electricity prices will rise this year, we estimate that both CPI and core CPI will gradually ease,” central bank Governor Yang Chin-Long told parliament.

Taiwan’s CPI and core CPI rose 2.49% and 2.61% respectively in 2023, he added.

Yang’s comments came after he said last week the central bank would probably not cut interest rates before June, as it may be necessary to raise the 2024 inflation forecast because of rising consumer prices.

Taiwan’s central bank is expected to hold its policy interest rate steady this week and to stay the course until early next year as it navigates ongoing concerns over inflation, according to economists in a Reuters poll.

(Reporting by Jeanny Kao; Writing by Faith Hung; Editing by Ben Blanchard and Jamie Freed)