Inflation in Fiji could be as high as 13% - ANZ economist
The rate of inflation could be a lot higher than 6 percent that has been projected by the Reserve Bank of Fiji by the end of the year as ANZ Bank economist says it could be as high as 13 percent.
ANZ Bank Economist Doctor Kishti Sen says what the average consumer is feeling is way more than what the Fiji Bureau of Statistics is telling us.
He says the current Consumer Price Index or the basket of goods and services that the Bureau of Statistics measures month to month was created using the Household Income Expenditure Survey done in 2008.
He says consumer spending has changed.
Dr. Sen says there is an urgent need to update the components of the Consumer Price Index, and the weights that are assigned has to be reflective of the current average consumer and, until and unless we get that, we will not really know what true inflation is in the economy.
He says food manufacturers have said that the price of production has gone up 25 to 30 percent and a lot of that has been passed on to the consumer.
Dr. Sen says just because an item may have price control, that does not mean the price will not increase as the control is only on the margin so if a retailer proves to the FCCC that the cost has gone up and they cannot absorb it, then they have to pass it on.
He says they have read that the Bureau of Statistics has said they are reviewing the weights and reviewing the basket and the data will be based on a more recent household income Expenditure Survey, and they should get those results by December.
Dr. Sen says the government should consider another round of inflation mitigation package.
