Taiwan’s inflation rate cooled to 1.2% in November 2025 compared to the previous year, missing economists’ expectations of a 1.5% rise. This deceleration followed a 1.5% inflation reading in October, driven largely by fading holiday-related price increases. Both goods and services inflation moderated, reflecting waning seasonal effects and a high base from the prior year’s data.

Inflation Slows as Seasonal and Food Price Pressures Ease

The headline inflation rate’s drop primarily resulted from subsiding holiday demand and a significant base effect in food prices. Goods inflation edged up by only 0.2% year-over-year, a notable slowdown from previous months, suggesting reduced cost pressures in the retail and manufacturing sectors. Meanwhile, services inflation declined to 2.2%, signaling lower cost expansions in critical areas such as transportation and hospitality.

Food inflation’s moderation stemmed from the elevated price levels recorded a year earlier, which raised the comparison baseline, diminishing the current year’s percentage increase. The combination of these factors culminated in a headline inflation figure that underperformed market consensus, pointing to a calmer price environment across Taiwan’s economy.

Core Inflation Reflects a Wider Ease in Price Growth

Excluding volatile items that represent 7.8% of the CPI basket—specifically vegetables, fruits, and energy—core inflation moderated to 1.7% year-over-year in November, down from 1.8% in October. This trend highlights that inflationary pressures are loosening beyond the more fluctuating food and energy segments.

Economists view the softer core inflation as a signal of stabilizing underlying price dynamics, which could alleviate pressure on Taiwan’s central bank regarding aggressive monetary tightening. The data suggest continued cautious monitoring by policymakers to balance price stability with economic growth objectives amid ongoing global uncertainties.

Inflation: Market Outlook

With November’s inflation rate easing to 1.2%, below forecasts, Taiwan is experiencing a slowdown after October’s holiday-driven spike. The softer inflation backdrop provides some relief to consumers and businesses, while also tempering concerns around overheating. Investors will likely incorporate this muted inflation trajectory into their positioning as Taiwan navigates domestic demand fluctuations and external economic challenges in the months ahead.