The consumer price index (CPI) last month picked up 0.96 percent from a year earlier as food, transportation, medical care and living costs rose modestly due to better demand, the Directorate-General of Budget, Accounting and Statistics (DGBAS) said yesterday.

The benign inflationary reading would give the central bank room to keep interest rates unchanged during its policy meeting later this month to support the nation’s economy, analysts said.

“The latest CPI value suggests stable consumer prices, although some food items rose drastically,” DGBAS senior executive officer Jasmine Mei (梅家瑗) told a media briefing.

The CPI — a critical fiscal and monetary policy reference that measures the cost of goods and services across the nation — declined 0.01 percent after seasonal adjustments, the statistics agency’s report said.

Food costs climbed 1.34 percent from a year earlier, as hot weather and two typhoons in July weighed on the supply of vegetables and pushed up prices by 8.79 percent, Mei said.

Fishery, milk and meat products also gained 4.56 percent, 2.82 percent and 2.63 percent respectively, and helped subdue a 13.73 percent slump in fruit prices, the DGBAS report showed.

Living costs picked up 1.09 percent because state-run CPC Corp, Taiwan (CPC, 台灣中油) raised its prices of gas and oil products by 13.84 percent, the report said.

Medical care costs rose 1.72 percent after hospitals and clinics raised outpatient and co-payment rates to discourage unnecessary visits, it said.

Core CPI — a more reliable long-term tracker of consumer prices because it excludes volatile items such as vegetables, fruits and energy — increased 0.96 percent last month from a year earlier.

The inflationary gauge rose an average of 0.97 percent in the first eight months, the report said.

The wholesale price index (WPI), a measure of commercial production costs, advanced 1.03 percent last month from a year earlier, the report found, reversing a revised 0.74 percent decline.

Import prices rose 5.23 percent, while export prices increased 3.55 percent as oil and raw material costs rose, the report said.

For the first eight months, WPI edged up 0.64 percent, it said.

The mild inflation would allow the central bank to hold interest rates steady when it convenes a quarterly board meeting later this month and beyond, SinoPac Securities (永豐金證券) analyst Lexie Lin (林南君) said.

“Stable consumer prices suggest there is no need to tighten money supply,” Lin said by telephone.

The bank might also want to maintain a loose environment to help stimulate lackluster GDP growth, she added.

The security house expects the central bank to keep rates on hold through the first half of next year and visibility is poor beyond that, Lin said.