TAIPEI (Taiwan News) — With war raging in Ukraine, the Consumer Price Index (CPI) is likely to cross the 3% mark in March, with high prices likely to stay, the Taiwan Institute of Economic Research (TIER) said Friday (March 15).
At a news conference expanding on Taiwan’s economic prospects, TIER President Chang Chien-yi (張建一) said rising international oil prices were the most influential in bringing about inflation in the country. He also foresaw a continued increase in prices for eating out, CNA reported.
As to trends later in the year, the think tank expert named the third quarter of 2022 as a crucial period. If the war in Ukraine was over by then, prices for oil products and for raw materials might stabilize, he said.
In the longer term, a return to lower prices was unlikely as adjustments of supply chains might last 10 years, according to Chang. The trade war between the United States and China followed by the COVID-19 pandemic and the Russian invasion in Ukraine amounted to the end of an era, he said.
For all of 2022, TIER experts still forecast an inflation rate between 2% and 2.5%, with the speeding up of the CPI overtaken by economic growth. Rising wages would help offset the negative impression the higher CPI made on the public, economists said.