Editorial

Taking a stand on inflation

(CNA photos)

• Publication Date：05/06/2012
• Source： Taiwan Today

Over the past few weeks, ROC Premier Sean C. Chen and his Cabinet have been keeping a close eye on consumer prices in Taiwan as part of government efforts to stave off the specter of inflation and keep the island’s nascent economic recovery on track.

The challenges faced by Chen and his team are the result of rising electricity and oil costs, as well as a soaring local housing market that is responding less quickly than expected to price-capping measures. But the premier understands the complexities of the situation and is committed to turning inflationary lemons into lemonade.

Conceding that rising prices are a fact of life in any growing economy, Chen believes there are simple and effective ways to keep increases under control and the inflation genie tightly corked in its bottle.

Late last month, he unveiled a comprehensive program of price checks at traditional markets and supermarkets around the island. The Consumer Protection Commission, Fair Trade Commission and Ministry of Economic Affairs are all on the lookout for unusual variations in the cost of goods, with the government’s policy on the matter clearly communicated to major retailers.

As part of this monitoring campaign, the MOEA is staging a series of meetings around Taiwan advising merchants on appropriate pricing policies. The ministry will also provide guidance on energy saving and cost controls.

These initiatives send a strong message that unreasonable price fluctuations will not be tolerated and that reducing cost-of-living increases remains a top priority for the government. At a time when Taiwan’s export performance is beginning to bounce back, is it critical that consumer confidence must not be undermined.

But the effect of the measures will not be felt overnight. In a forecast released April 17, Taipei-based Chung-hua Institution for Economic Research revised downward Taiwan’s economic growth from 4.07 percent to 3.55 percent and raised the rate for consumer price increases from 1.48 percent to 1.93 percent.

Admittedly, this is not the kind of news to cheer the government as it sets about formulating policies to steer Taiwan’s export-based economy through the current period of inflationary pressure. Yet, there can be doubt it is more than up to the task, having already demonstrated a blue-ribbon economic pedigree when dealing with such challenges as the 18-month Great Recession.

As Chen’s and other planned government initiatives guaranteeing price stability take hold, Taiwan is assured of being in a strong position to weather inflationary challenges. This brand of pragmatic policymaking is certain to see the island emerge in good shape and continue advancing along the path toward greater economic prosperity.

Writet to Taiwan Today at ttonline@mail.gio.gov.tw