Freight costs have increased by two to threefold compared to the beginning of last year, and this has contributed to inflation – RBF Governor

The Reserve Bank of Fiji Governor, Ariff Ali says generally inflation based on the basket of goods has been in the negative territory for almost two years until last month as freight costs is affecting the prices of goods.

While speaking during a webinar of the Fiji Institute of Accountants, Ali says freight costs have increased by two to threefold compared to the beginning of last year.

The annual inflation rate turned positive in August and stood at 0.8 percent, higher than the -0.4 percent recorded in the previous month, led by higher food and energy prices.

The RBF says in Fiji, food prices rose by 6.9 percent, while the upswing in global energy prices underlined the 36.5 percent average growth in domestic fuel prices compared to the same period last year.

It says inflation is expected to pick up and settle at 2 percent by the end of this year.

The RBF says globally, supply chain blockages, exorbitant shipping costs and higher fuel and energy prices have fuelled inflation in some countries, prompting a reassessment of their accommodative stance.

Global food prices rose in August, while oil prices dipped over the month.