Consumer prices in Taiwan declined for the first time in eight months in August, as prices of vegetables and fruits fell sharply on account of stable climate conditions, the Directorate General of Budget, Accounting and Statistics said Monday.

Consumer prices decreased 0.46% annually in August, following a 1.31% increase in July, while economists were expecting a flat reading. Fruit prices were down 7.21% year-on-year during the month and vegetable prices declined 24.84%.

During the same month last year, vegetables and fruits were relatively expensive in the aftermath of a typhoon. Clothing prices rose 3.62% in August and prices of tobacco and betelnut advanced 4.4% annually. Prices of transportation and communication equipment moved up 4.45%.

On a monthly basis, consumer prices rose 0.02% while the seasonally adjusted consumer price index increased 0.08% month-on-month. The monthly growth in prices was influenced by higher prices in vegetables and fruits when compared to July. The core CPI rose 0.4% from last year and 0.34% month-on-month.

In August, the annual wholesale price inflation slowed to 3.37% from 5.31% in July. Consensus forecast was 3.1%. On a monthly basis, wholesale prices rose 0.42% and fell 0.52% after adjusting to seasonal factors.

During the January to August period, consumer prices recorded 0.99% increase and wholesale prices were up 6.72%.

Domestic sale prices, excluding imports prices, rose 3.75% year-on-year and 0.56% monthly. At the same time, import prices rose 4.58% annually and 0.71% on a monthly basis. Exports prices went up 1.75% yearly and fell 0.04% from previous month.

In June, Taiwan's central bank raised its interest rates for the first time since June 2008 as the economy recovered strongly from the recession, boosted by higher exports. The central bank made 12.5 basis point hike, which took the discount rate to 1.375%, the secured loans rate to 1.75% and the unsecured loan rate to 3.625%.

Taiwanese economy maintained a double-digit growth in the second quarter on the back of strong exports, though the pace of expansion moderated slightly from the first three months of the year. Gross domestic product increased 12.53% annually in the June quarter, compared to 13.7% expansion in the prior quarter.

The country relies heavily on its export sector. While demand from the U.S. and Europe remains relatively weak, the island's export growth has been fueled by strong demand from China for its hi-tech products.