Higher kava prices, inflation rate stands at 2.3pc
31 March, 2018, 12:00 am
THE country’s inflation rate rose to 2.3 per cent in February from an earlier low of 1.5 per cent in January, the central bank reported in its latest economic review.
The rise in inflation last month was however lower than the 5.5 per cent registered in the same period last year.
According to the Reserve Bank of Fiji (RBF) Economic Review for the month ended March 2018, the high inflation over the review period of February was attributed to the higher prices for kava, alcohol and tobacco.
This was also coupled with the increase in domestic fuel prices contributed to this outcome.
At the end of last year, inflation stood at 2.8 per cent in December 2017, slightly higher than the 2.6 per cent recorded in the previous month of November 2018 and the forecast of 2.5 per cent for 2017.
This was also caused by the higher yaqona and tobacco prices persisted throughout the year and are likely to continue in the months ahead.
Inflation is the rate of increase in the overall level of prices of goods and services in an economy over time. It is generally reported as a rate of increase of prices over a period, usually a year.
In normal economic circumstances, if the level of money supply grows faster than the real output, it can cause inflation, hence reducing purchasing power at a point in time.
However, inflation is not only influenced by monetary conditions because supply and demand conditions can also lead to price changes.
An increase in inflation can also mean that the amount of goods that your money can buy decreases along with its purchasing power.
The central bank now forecasts the year-end inflation at 3.0 per cent on account of higher actual inflation outcomes in the first two months of the year coupled with upside risks such as increases in global commodity prices and trading partner inflation.