Taipei- Taiwan's inflation rate inched up 1.59 per cent in January due mainly to an increase in food prices during the lunar Chinese New Year which started on January 26, the government's statistics agency said Thursday.

"The slight rise was due to strong demand in food during the lunar Chinese New Year holiday, which forced up food prices," said Wu Chao-ming, a spokesman of the Directorate General of Budget, Accounting and Statistics.

He said the island's consumer price index has remained relatively flat since hitting a 14-year high of 5.92 per cent in July.

The global downturn and oil price drops since the third quarter of 2008 have dampened domestic consumption and pushed down prices. (dpa)