Inflation up 8.2%

Fiji Times - Friday, April 02, 2010

THE cost of goods rose in the month of February with the Reserve Bank of Fiji recording an inflation rate of 8.1 per cent.

This compared to the 6.3 per cent in January and 1.9 per cent a year ago.

The central bank said prices had risen by 8.5 per cent since devaluation last April.

"The current year-end inflation forecast is 2.0 per cent but this is expected to be revised upward in light of the impact of Cyclone Tomas on prices of market items.

"In addition, the planned removal of price controls on certain basket items, the weakening of the Fiji dollar against the yen, Australian and the US dollars, higher oil prices and the expected recovery in the domestic sector are expected to add price pressures in the next few months," Governor Sada Reddy said.

By the end of March, the RBF said foreign reserves were over $1billion, which was equivalent to months of imports of goods and non-factor services.

Bank liquidity levels are currently around $294 million.

The Nominal Effective Exchange Rate (NEER) index fell over the month to February by 0.2 per cent, indicating a slight depreciation in the Fiji dollar when compared with the major trading partner currencies in the basket.

The negative effects of inflation include a decrease in the real value of money and other monetary items over time. High inflation may lead to shortages of goods if consumers begin hoarding out of concern that prices will increase in the future. Positive effects include a mitigation of economic recessions and debt relief by reducing the real level of debt.

Price rise alarm

Friday, April 02, 2010

ANOTHER price increase for milk, powdered or liquid, will make it even more difficult for struggling families with small children to buy milk for their young.

These were the sentiments of Vidya Wati of Koronivia Road, Nausori who has a four-year-old granddaughter for whom they had to buy milk before a fortnight is over.

The 52-year-old Suva market vendor said the price of milk was already expensive and another increase would make it even harder.

"My granddaughter is four years old and she takes milk every morning and every evening, sometimes during the day too when she cries for it but we have to have her milk there, it is good for her health," Mrs Wati said.

"At present, we are buying powdered milk for $4.50 a packet and sometimes more in other supermarkets, and it is not only milk we have to buy because we have to buy Weet-Bix for her too and even the price of that has gone up," she said. "We earn very little for our livelihood and further increases in the prices of these products will make it harder for us."

The same sentiments were echoed by 27-year-old Lavenia Kaci of Tacirua who has two sons aged two years and eight months respectively. "The price of milk is very expensive but we have to buy for our children so we call on authorities to please consider our plight and the health of our children when making decisions on price increases," Ms Kaci said.

"If there is another increase in the price of milk, we don't know what to do because as it is we are already struggling with today's prices of groceries and that includes milk," she said.

These comments by at least two women follow revelation by Rewa Dairy Cooperative that it is seeking a 60 per cent to 80 per cent increase in the prices of milk and butter if its business was to make profit.