Consumer price index continues downward in May

By Alfred Lee, The China Post

The consumer price index (CPI) for May stood at 103.78 (relative to 1996’s index of 100), down 0.02 percent, or after being adjusted for seasonal factors down 0.06 percent, from the previous month, according to the Directorate General of Budget, Accounting & Statistics (DGBAS) under the Executive Yuan. The May CPI fell 0.21 percent from one year earlier. The average CPI for the first five months saw a slight rise of 0.4 percent from the same period of last year.

Meanwhile, the wholesale price index (WPI) for May dropped to a 20-year low of 95.79, showing a decline of 0.03 percent from the previous month. After adjustment for seasonal factors, the fall could be expanded to around 0.28 percent. Compared to the same month of last year, the WPI declined 1.16 percent.

The decline in the CPI in May was mainly due to declining prices of vegetables, fruit, fish, shellfish, and meat. Prices of clothing declined 0.51 percent in May. Transportation costs declined by 0.19 percent mainly because of the lowering of airline ticket prices. Prices in the category of school tuition and entertainment in May increased 3.13 percent over those of May last year mainly because of a 6.14 percent hike in tuition fees, contributing a 0.45-percent hike to the May CPI. Prices in the transportation sector in May went up 1.41 percent from one year earlier, mainly because the Chinese Petroleum Corp. has raised oil prices several times since June last year. The core consumer price index, excluding prices for energy, fresh vegetables, fish, meat and other and fisheries products, in the first five months of the year increased 0.64 percent over the same period of last year.

Declining commodity prices during the first five months were attributed to the slowing economy and intensifying market competition. The DGBAS said that price hikes in the service sector were moderate for the first five months of this year partly due to a sluggish real estate market and declining telecommunications fees. The general CPI consists of seven price categories: food, clothing, housing, transportation, medical and health, tuition and entertainment and miscellaneous items which cannot be classified as any of the above.

According to the DGBAS, the CPI in the U.S. climbed 3.4 percent during the first four months of this year, whereas the figure was down in Hong Kong by 1.5 percent and in Japan by 0.2 percent, and was up by 0.18 percent in Singapore, by 4.5 percent in South Korea, and by 1.5 percent in Malaysia.