Taipei - Taiwan's year-on-year inflation rate dipped to a six-year low of 1.31 per cent in February, a senior official of the government's statistics agency said Thursday.

"Reduced demands amid the global downturn forced down prices, especially those on transports, clothing and food," said Wu Chao-ming, a spokesman of the Directorate General of Budget, Accounting and Statistics.

Wu cited abundant supply of vegetable and fruit, discounts on winter clothing and a drop of prices for consumer electronics products as among the major causes of falling prices.

Another cause for the declining inflation rate was that the lunar Chinese New Year fell into the month of February in 2008, while it fell on January 26 this year, Wu said. During the New Year prices tend to rise due to increased demand. (dpa)