News
Inflation to rise if electricity rate hikes implemented
Central Bank Governor Yang Chin-long (楊金龍) predicts Taiwan's Consumer Price Index (CPI) might increase by more than 2% in 2024, surpassing the central bank's forecast and the Directorate General of Budget, Accounting, and Statistics' revised estimate.
This anticipated growth is attributed to potential electricity rate hikes aimed at mitigating Taipower's significant losses. The Ministry of Economic Affairs is set to review power rates, with increases expected from April to address Taipower's financial struggles.
Amidst rising inflation concerns, the central bank continues its tight monetary policy. Yang emphasized the challenge of maintaining consumer price stability, especially with the CPI possibly exceeding 2%. He also highlighted the central bank's cautious approach to interest rate adjustments and market trends, including the surging interest in Exchange Traded Funds and the housing market's growth.
Meanwhile, Ministry of Economic Affairs Minister Wang Mei-hua (王美花) asserts there’s no disagreement with the Directorate-General of Budget, Accounting and Statistics over budget plans. That’s after DGBAS minister Zhu Ze-min (朱澤民) expressed doubts about Wang's plan to use last year’s budget surplus to subsidize Taipower.
If that subsidy goes through, Zhu told the Legislative Yuan yesterday that next year’s budget will be very tight, prompting concerns over conflict between the two ministries. The plan involves using NT$150 billion of the surplus to help the state power company with financial troubles, stemming from efforts to limit rate hikes. Wang has been pushing to keep rates down in order to fight inflation. A meeting to review the price of electricity is set for later this month.
