Consumer prices in Taiwan fell to 0.05 percent year-on-year in December of 2018, following a 0.31 percent gain in the previous month and below market consensus of a 0.3 percent rise. It was the first drop in consumer prices since October last year, as cost of transportation & communication declined (-1 percent vs 0.7 percent in November). Also, prices decreased further for food (-0.6 percent vs -0.5 percent in November), namely vegetables (-26.1 percent); clothing (-1.2 percent vs -1.1 percent) and education & entertainment (-0.2 percent vs -0.1 percent) while cost of miscellaneous goods & services slowed (1 percent vs 1.9 percent). Meantime, prices advanced at a faster pace for health (0.7 percent vs 0.9 percent) and inflation was steady for housing (0.7 percent, the same as in November). Annual core inflation, which excludes fruits, vegetables and energy went up 0.5 percent, easing from a 0.7 percent increase in the prior month. On a monthly basis, consumer prices fell 0.3 percent. Inflation Rate in Taiwan averaged 4.07 percent from 1960 until 2018, reaching an all time high of 61.47 percent in March of 1974 and a record low of -3.09 percent in October of 1970.
Inflation Rate in Taiwan is expected to be 0.90 percent by the end of this quarter, according to Trading Economics global macro models and analysts expectations. Looking forward, we estimate Inflation Rate in Taiwan to stand at 1.70 in 12 months time. In the long-term, the Taiwan Inflation Rate is projected to trend around 2.10 percent in 2020, according to our econometric models.