The annual growth rate of CPI in major countries in the past 1 year

Reporter Zheng Qifang / special report

Imported inflation is on the rise, as electricity prices will be raised again. It is expected that CPI will still rise above 2% this year.

(file photo)

Global inflation remains high. Inflation in Europe and the United States once soared to a new high in more than 40 years. Taiwan’s CPI (Consumer Price Index) also rose the most in 14 years. In order to curb inflation, the US Federal Reserve (Fed) started raising interest rates in March last year After the cycle, Taiwan's central bank also followed up simultaneously, but there was a big gap in the rate hike rate, and the interest rate gap between Taiwan and the United States accelerated.

Scholars said that the Fed’s interest rate hikes have slowed down recently. In March, it only raised interest rates by 1 yard (0.25 percentage points), and suggested that it will only raise interest rates once more this year. It is expected to stop raising interest rates in the second half of the year. Increased by half a size last week.

In the past few years, the COVID-19 epidemic has spread, supply chain bottlenecks have pushed up prices, coupled with the outbreak of the Ukrainian-Russian War in February 2022, international energy and agricultural food prices have soared, and global inflation has worsened; the US CPI in June increased by 9.1% year-on-year, hitting a record high The 40-year high fell to 6% in February this year; the CPI in the euro area increased by 10.6% in October last year, a new high since its establishment, and the CPI in February this year still reached 8.5%.

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Inflation in Europe and the United States is still high, the Fed will cut interest rates and wait for next year

Due to my country's dependence on imports of energy and bulk materials, "imported inflation" is on the rise. In June last year, the CPI once soared to 3.59%, reaching 2.95% for the whole year, a 14-year high; 2.16%, breaking through the 2% inflation warning line for two consecutive years.

However, due to another increase in electricity prices, it is expected that the CPI will be revised upwards again this year.

The official said frankly that under the high base period, the CPI growth rate this year is still above 2%. Compared with the long-term average growth rate of about 1%, "there is still price pressure."

Ye Yinhua, chairman of Yuanta Baohua Comprehensive Economic Research Institute, said that U.S. inflation has fallen, but not by a lot. The CPI in February was in line with expectations, but the core CPI was higher than expected, because the U.S. labor market is tight, and wage growth is higher than the average over the past years. The downward rigidity of commodity prices. Although commodity prices have fallen recently, service prices have risen, and inflationary pressures are still high.

He pointed out that the recent collapse of Silicon Valley Bank and other incidents belonged to regional banks, and they were not big enough to shake the Fed's policy. Therefore, the Fed only raised interest rates by one yard as expected by the market. It is estimated that interest rates will remain unchanged in the second half of the year, but the rate cut may have to wait until next year.

As for the movement of Taiwan's central bank.

Ye Yinhua said that the central bank is facing a difficult choice. The current economic downturn, but the CPI increase is still more than 2%. Whether the central bank raises interest rates, in addition to considering the inflation issue, must also consider the economic downturn and housing loan burden.

He pointed out that from the actions of the central bank in recent years, it does not take into account the interest rate difference between Taiwan and the United States. If the Fed really only raises interest rates once this year, the central bank will have less pressure to raise interest rates.

Poor exports, Taiwan's central bank should stop raising interest rates earlier

Qiu Junrong, a professor of economics at Central University, also believes that the collapse of Silicon Valley Bank and other incidents belonged to small and medium-sized regional banks, and the money was taken out and then went to big banks, which means that the industry has not lost confidence in the banks; it is also because the fire was quickly extinguished , There is almost no pressure on the Fed, so it will not change the Fed's decision-making; however, the economy is a little panicked and a little lacking in confidence, and the Fed does not need to fight against the market. Therefore, the Fed raised interest rates by 1 yard as expected, but the next time it may Make it up.

He pointed out that the current "inflation rigidity" is very obvious, and the demand in the United States is buoyant. If the economy does not go through a relatively thorough recession, including a significant increase in the unemployment rate, it seems that inflation will be difficult to fight. "The Fed is not afraid of recession. Even expecting a recession, so don't underestimate the Fed's resolve."

As for when the Fed will stop raising interest rates?

He said that although the Fed hinted to raise interest rates again this year, it still needs to observe whether inflation will come down in the second half of the year. If the US CPI is still at 5% or 6%, it may not stop raising interest rates, and there is no possibility of interest rate cuts this year.

Qiu Junrong said frankly that Taiwan's central bank has always given people the impression that stabilizing prices is secondary and assisting economic growth is more important. Now that the domestic economy is not good, the main reason is that exports are not good, and depreciation to save exports is still taken into consideration; Continued for a period of time, the pressure on the central bank should be the main reason why the central bank’s interest rate has risen five times in a row. Whether to raise interest rates in the second quarter depends on inflation, but Taiwan should stop raising interest rates earlier than the United States unless there is a very obvious increase in domestic prices. Variety.

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