Taiwan’s annual inflation rate eased to 2.04% in August 2026 from 2.54% in July. Although this was the lowest reading since April, it marked a fourth straight month above the central bank’s 2% target, keeping investors cautious and strengthening expectations of an imminent rate hike ahead of next week’s policy meeting at the Central Bank of the Republic of China.
The moderation was driven largely by food prices, which slowed sharply to 0.79% from 2.49% in July, the smallest increase since the bout of deflation in March. Inflation also softened in housing (2.31% vs 2.32%), health (0.61% vs 0.76%), and miscellaneous goods and services (2.73% vs 3.27%), while education and entertainment held steady at 3.22%.
By contrast, prices accelerated in transportation and communication (2.77% vs 2.72%) and in clothing and footwear (2.09% vs 1.66%). On a seasonally adjusted monthly basis, consumer prices rose 0.13%, down from a revised 0.19% in July, the smallest increase since November 2025.
