Taiwan’s inflation may have risen 1.5% in September

September inflation grinds higher on rising housing costs
Consumer price inflation data for September is out on 5 October. We expect it to have risen by 1.55% y/y, up slightly from the 1.34% y/y recorded in August. The low base will likely lift overall transportation costs higher from a year ago, while supply disruptions to fruit and vegetables resulting from typhoon Nanmadol have caused a temporary spike in food prices.

We expect core inflation – excluding food and energy prices – to continue to grind higher on a y/y basis in September, chiefly on rising housing costs. This will continue to worry local policy makers because of the risk stemming from higher labour and rental costs, even though recent data suggests that the upside risk to headline inflation appears to have stabilised.