Taiwan to raise forecast for 2008 inflation

Taiwan may boost its 2008 inflation forecast after the price of crude oil reached US$100 a barrel for the first time, a government official said.

"Based on what we know as of today, we will likely raise the forecast when we meet in February," Tsai Yu-tai, section chief of the macroeconomic forecast unit at the statistics bureau, said in a telephone interview in Taipei yesterday.

The island imports almost all the oil it uses, and joins economies across Asia in experiencing accelerating inflation as energy prices soar. Japan's core consumer prices rose the most in more than nine years in November and Thailand's inflation quickened to a 12-month high in December.

Taiwan's consumer prices increased 5.33 percent in October from a year earlier, the biggest gain in 13 years, on food and energy costs.

The statistic bureau had estimated consumer prices would climb 1.84 percent this year compared with a projected 1.65 percent increase in 2007, based on the assumption that the price of crude oil averaged US$73.6 a barrel. The government releases updated inflation forecasts in February, May, August, and November each year.

Crude oil for February delivery traded at US$99.31 a barrel in after-hours electronic trading on the New York Mercantile Exchange at 10:22 a.m. yesterday in Singapore. It reached a record US$100 a barrel Wednesday.