Taiwan inflation hits 14-year high in June

Taiwan's inflation rate hit a new 14-year high in June, with the consumer price index CPI expanding by 3.59 per cent from a year earlier, more than market expectations.

The pace was slightly worse than economists' predictions for a 3.5 per cent increase in May after the 3.39 per cent year-on-year reading for May, the Directorate General of Budget, Accounting and Statistics said in a statement on Wednesday.

It was the highest monthly reading since August of 2008, when the CPI rose 4.68 per cent, and will likely add to pressure to raise interest rates.

Core CPI, a better measure of price pressures, rose 2.77 per cent year-on-year from 2.60 per cent in May. It excludes more volatile energy, vegetable and fruit prices.

The central bank of Taiwan raised its policy rate for the second time this year in June, reflecting concerns about inflation and reducing the trade-reliant island's growth outlook for 2022, as well as trimmed the trade-reliant island's growth outlook for 2022.

In the second half of the year, analysts had been expecting to see one or two more modest rate hikes.

Taiwan's export-reliant economy has been supported by a global shortage of semiconductors that fills Taiwanese chipmakers' order books, and price pressures are still moderate, compared to in the United States and Europe.

On Tuesday, South Korea reported that its inflation last month hit a 24 year high, growing a bit faster than expected 6.0 per cent in June over a year earlier in the year, the highest since November 1998.

The government says that Taiwan's economic fundamentals remain sound, even as the stock market has swooned, pointing to its world-leading semiconductor industry.

On Wednesday, chip maker United Microelectronics Corp, whose clients include Qualcomm and Germany's Infineon, reported June sales soared 43.2 per cent year-on-year, with first-half sales rising 38.2 per cent year-on-year.