Taipei: Taiwan's consumer price index (CPI) declined for the third consecutive month in June, reaching a year-on-year growth rate of 1.37 percent, the lowest in more than four years, as reported by the Directorate General of Budget, Accounting and Statistics (DGBAS) on Tuesday.

According to Focus Taiwan, the CPI increase in June moderated compared to the 1.55 percent growth observed in May, marking the second consecutive month of growth below the central bank's 2 percent inflation alert threshold. This decline is attributed to the Dragon Boat Festival, which fell in June last year, creating a high base for comparison and contributing to the historically low CPI growth rate.

In June, the core CPI, excluding fruit, vegetables, and energy, rose by 1.47 percent year-on-year, remaining below the 2 percent inflation alert threshold for the 15th month in a row. However, DGBAS specialist Tsao Chih-hung noted that while overall prices stabilized, dining-out expenses rose by 3.44 percent, and rent increased by 2.3 percent. Additionally, prices for many frequently purchased goods also increased, indicating that the public might still feel inflation's impact.

The domestic wholesale price index fell by 6.94 percent year-on-year in June. This decline has helped reduce production costs across various stages, easing upward pressure on commodity prices. As a result, prices are expected to stabilize further by the fourth quarter, according to Tsao.

Despite the slow growth in CPI, food prices increased by 2.82 percent from a year earlier in June, while dining-out costs rose by 3.44 percent, contributing to the month's CPI growth. DGBAS statistics indicate that dining-out expenses have increased by more than 3 percent for eight consecutive months, though the June increase was slightly lower compared to May.

Looking ahead, Tsao highlighted that weather will be an important factor affecting the CPI. Following Typhoon Danas, which struck central and southern Taiwan in early July, consumer prices are anticipated to rise. However, given the high comparison base from a similar event last year, CPI growth is expected to continue slowing quarter by quarter.

Tsao projected that inflation will likely remain below 2 percent in July, with CPI growth continuing to slow in the third and fourth quarters. On a global scale, Tsao noted that international raw material prices are trending downward due to high international uncertainty and weak global end-user demand.

Furthermore, the Taiwan dollar's appreciation against the U.S. dollar in May and June pushed the import price index in Taiwan dollar terms down by 10.35 percent year-on-year in June, marking the largest decline in 57 months, according to Tsao.