Weather key in determining Taiwan's 2006 consumer prices: report

Whether the consumer prices in Taiwan will be kept a stable level in 2006 is not at the hands of economic policymakers, but largely depend on the weather conditions in the province, according to media reports Saturday from Taipei.

Weather conditions are "crucial" in determining whether consumer prices are maintained at a stable level this year, Wu Chao-ming, a local budget and statistics official, was quoted by local media as saying.

If temperate weather dominates in Taiwan for the rest of this year, the province could then expect a year-on-year increase for vegetables output to reach about 3.08 million tons, thus bringing a potential 20-percent drop in terms of vegetable prices, according to local media.

Wu said once the projection becomes reality, the drop in vegetable prices would lead to the 2006 consumer price index (CPI) sliding some 0.6 percentage points, a key decrease that could ensure the 2006 CPI will not breach the 2-percent ceiling.

Local government has vowed to keep the annual CPI growth below 2 percent since the cost of fuel products has surged due to price hikes in the global oil market.

Taiwan's CPI posted a growth of 1.23 percent in April, with the average expansion of the CPIs in the first four months reaching 1. 32 percent, according to local government's latest statistics.

Though the figures represented a mild growth, Wu said, calculations for fuel price hikes in late April have not yet taken into account.

Many challenges are still ahead for local government as it seeks to stabilize prices, he said, like a possible adjustment of electricity fees and ongoing increases in the price of international crude oil.

Source: Xinhua