Taiwan reports biggest fall in CPI in nearly 40 years.


On the other side of the globe, the small but important country of Taiwan has boldly dipped its feet into the sea of deflation.

Wall Street Journal. July 07, 2009.

Taiwan reports biggest fall in CPI in nearly 40 years.

TAIPEI — Taiwan’s consumer-price index posted its largest fall since 1970 in June as the government warned prices will remain depressed for the rest of the year.

Taiwan’s CPI fell 1.97% in June from a year earlier, steeper than May’s 0.08% drop and the fifth consecutive month of falling prices, data from the Directorate General of Budget, Accounting and Statistics showed. The June drop marked largest decline in CPI since a 3.07% fall recorded in October 1970.

Deflationary pressures persist in Taiwan, said Wu Chao-ming, head of the directorate’s prices section. He predicted that the island’s consumer and wholesale prices will likely continue falling during the second half of this year. Part of the reason is a higher base of comparison from 2008, Mr. Wu said, though he noted weakness in private consumption.

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