Taiwan’s annual inflation rate slowed to 2.04% in August 2026 from 2.54% in July, but remained above the 2% inflation alert threshold for a fourth consecutive month. The reading was the lowest since April. Core CPI, excluding fruit, vegetables and energy, rose 2.3%, indicating that underlying price pressures persisted. Food-price inflation fell sharply to 0.79% from 2.49%, its weakest increase since deflation in March, although eggs, seafood, prepared foods, meat and dining-out costs continued to rise. On a seasonally adjusted monthly basis, consumer prices increased 0.13%, down from a revised 0.19% in July and the lowest level since November 2025, while the unadjusted index edged down 0.01%. All seven major spending categories recorded annual increases. Education and entertainment led at 3.22%, followed by miscellaneous goods at 2.73%, transportation and communications at 2.77%, housing at 2.31% and apparel at 2.09%. For the first eight months, CPI averaged a 1.84% annual increase, with services rising 2.41% and goods up 1.21%. Upstream pressures were considerably stronger: the Producer Price Index rose 16.75% in August, while import and export price indexes in U.S. dollar terms increased 20.45% and 23.05%, respectively. The trajectory of food, fuel and dining-out prices, alongside any pass-through from producer costs, will shape whether inflation returns below 2% in the coming months.