Taoyuan Nights

Having just returned from a trip to the UK, I was stunned to find that in just 2-3 weeks, prices have shot up on a number of items I typically buy.

Fruit and vegetables: subjectively, seem to be about 10% more expensive.
Yoghurt drinks: up 20%.
Bus travel: From $15, to $18 - and given the hassle of carrying lots of $1 coins, that’s arguably an increase to $20! That’s 33%!
Baked items: Noticably more pricey, around 10%.
Electricity bill: Through the roof (even though the electricity has been turned off!).

So far, I’ve only been in a couple of small shops - and I am not looking forward to my weekly spend at the supermarket if this pattern of price increases holds up. Thankfully, my rent has stayed the same this year, which is nice as it represents a big part of my spending.

Of course, economists might look at this and scoff - what about the many items that didn’t go up in price, which I didn’t mention - cans of ‘Vitali’, for example? What about the expensive items that take up a lot of people’s money, like flat-screen TVs, that usually go down in price over time?

The first point would be fair - we tend to notice changes more than things staying the same, and it is easy to build a skewed view of reality for this reason. But in regard to the second point: well, I wouldn’t really care if cars or flat-screen TVs came down 10% in price in the last 2 weeks - and I doubt very much that they did. Generally, I don’t make many discretionary purchases*, so my ‘personal price inflation’ is probably more like that of a old person - just the basics, thanks!

It seems though that on this occasion, the economists would probably agree that a bit of slightly higher inflation is appearing. The Taipei Times reported today that inflation jumped this month.

And from the China Post:

And that’s just in one month! Some of the other measures of inflation show it to be rocketing up fast for manufacturers as well as consumers:

Scary. Typical bank interest rates at around 2-2.5%; broad annual inflation** at up to 6.25%, and with a 1-month jump of anything up to 5% depending on what you’re buying. Watch your spending carefully, because there’s a very real chance your wage rise this year won’t come close to covering the increase in the cost of living.

Links: Michael Turton has recently written about Taiwanese food prices, here.

* discretionary purchase = ‘things you want / things you choose to buy’.
* non-discretionary purchase = ‘things you need / things you have no choice about buying’.
** I recommend being a bit wary of all government inflation figures - not just Taiwan’s! I believe they will be understated by their design, since it is in most government’s interests to report low inflation rather than high inflation. I instead suggest estimating your own personal inflation using a standardised ’shopping basket’.