CONSUMER PRICE INDEX, MALDIVES

Transcription

1 CONSUMER PRICE INDEX, MALDIVES Department of National Planning Inflation Rates - Maldives National Male Atolls Comparison of Rates of Inflation (%) for some selected countries Sri Lanka 14.4% 17.5% 13.7% India 7.8% 5.1% 6.6% Malaysia 5.8% 2.1% 3.6% Thailand 5.5% 2.2 % 4.7% Singapore 4.3% 1.8 % 1.0% Maldives 12.3% 7.4% 3.5% Data s ource : Ministry of Statistics & Program Implementation - India Department of Census & Statistics Sri Lanka - Sri Lanka Ministry of Planning and National Development - Maldives Key Economic Development and Prospects in the Asia-Pacific region, 2008, UNESCAP National Inflation Inflation Rates Rates (%) by (%) Major by Major Categories, Change Change (%) (%) Major Categories National 2008 Male 2007 Atolls 00. excluding fish 01. Food and beverages incl fish Food and beverage excl fish 1.1 Fish 1.1 Fish 02. Tobacco 03. Clothing & footwear Housing, water, electricity, gas & other fuels Actual 4.1 Actual rentals rentals for housing for housing Furnishing, household equip. & routine maint Health Transport Communication Recreation & culture Education Na Overview ( 2007 to 2008) Price changes by Major Categories Supplement: Annual The Consumer Price Index (CPI) for the country for all items was for 2008, increasing the cost of the basket of good and services which consumers were able to purchase with Rf 100 in e 2004 to 127 Rf in Figure 1: Inflation Rates , National, Atolls and Male Inflation rose sharply by 12.3% in 2008 compared to the 7.4% experienced in A combination of price hikes in fuel prices due to the global oil hike, rent prices due to high local demand, health related expenses as well as 4.00 transporatation costs 2.00 compared to 2007 were the major reason behind this high 0.00 rate of inflation in This increase in food prices by 18% also had a big impact on the household budget, as it constitutes a third of the household expenditures. Food price increase was felt to a large extent by the atoll population, who spends nearly 40% on food compared to 27% share in the case of Male. Sources of Changes in CPI for 2008 Figure 2: Sources of changes in CPI, % 80% 60% 40% 20% 0% -20% National Male' Atoll National Male' Atolls Miscellaneous Goods & Services Education Recreation & Culture Communication Transport Housing, water, electricity, gas and other fuels also contributed in driving the inflation up, about 10% for the overall inflation, a little more for Male and a bit less effect in theatolls. health Furnishings, Hh equip. & routine maint. Housing, Water,Electricity, gas & otherfuels Clothingand Footwear Fish Food ExcludingFish Inflation rate for the nation was driven mainly by food and beverages and fish, which in total accounted for more than 70% of the change as can be seen in figure 2, Sources of changes in CPI. Food and beverages contributed about 60% while fish contributed about 10%. Similar phenomena exists in Male as well as in theatolls. 11. Hotels, cafes & Restaurants 12. Miscellaneous goods & Services 13. Religious Activities Change (%) = / / Na Na On a monthly basis more than 8800 price quotations are collected from 360 outlets nation wide for the compilation of the Consumer Price Index (CPI) for the country Health category also contributed in pushing up the inflation, accounting for about 10% in for the overall inflation, about 12% in Male and close to 5% in theatolls. Increases in prices of daily consumed food items such as vegetables, milk products canned fish and other canned food products, bread, baby food combined with increase in prices of basic services such as, medical care, taxi charge, housing rents & fuel prices all during the same year had a substantial affect in this general price level increase. The compilation of the CPI involves the processing of several thousand price quotations. The Statistics Division wishes to acknowledge the cooperation given by the business community in supplying the required price data. National Accounts and Economic Statistics Section, Statistics Division, Department of National Planning Tel: (960) , Fax: (960) , stats@planning.gov.mv/econstat@planning.gov.mv, website:

2 Price changes by Major Categories Food and beverages Food and beverages category including fish registered a price increase of 17.80% at the national level, 19.07% in Male' and 16.82% inatolls. Fig 3: National Inflation Rates for food & Beverages excluding fish, Fish prices increased on average by about 10% during 2008 compared to an extravagant 60% in 2007.This rise in fish prices is due to a substancial decline in fish landings by 19% in 2008 compared to In % As fish accounts for a 5% share of household budget, an increase of 10% in fish prices resulted in pushing up inflation in the food group as well as the overall inflation. However, food and beverages excluding fish registered a higher price increase in Male as well as in the Atolls because fish prices increase was slight compared to other commodities for the year in question compared to the previous year. Although fish prices did not increase as much as the previous year, items such as milk product, cooking oil, different kinds of vegetables, meat and bakery products registered high price increases in Fresh vegetables such as carrot, cabbage, potato, beans and dhal experienced sharp rises in prices in some periods during the year, due to supply shortages in the domestic market partly due to sea transportation difficulties between India and Maldives due to bad weather. Such shortages effect the prices as we depend on imports to a large extent. Furthermore, food shortages in the world economy also contributed to the price increases. Milk and milk products saw huge increase in prices largely due to increase in prices in the international market in the early months of 2008, slowing down in the latter half of the year as the international market on dairy product also declined. Food Outlook - Global Market Analysis - November 2008 The e 2008 issue of Food Outlook foresaw world prices of major agricultural commodities declining from the record levels they had just reached amidst favourable prospects of global supplies. Since then, prices have indeed falen, but farther and faster than can be explained through production gains alone. Underlying the price slide, in excess of 50% from their recent peaks, are rather important factors, including the financial crisis, the halving of the world crude oil prices and the appreciation of the US Dollar. This was evidenced in this year s cereal production recovery, nearly all of which was concentrated in the developing countries. Under the current gloomy prospects for agricultural prices, high input costs and more difficult access to credit, farmers may cut their plantings, which might again result in a tightening of world food supplies. If, indeed, production is bound to falls sharply next year. International market prices of dairy products are now well under their levels of one year ago. In the November 2008 Food Outlook, the FAO index of dairy product prices (base =100) has risen from a value of 247 in 2007 to 262 in 2008 which is about 14% higher than previous year. According to the FAO analysis, increased supplies, weaker international demand as well as US Dollar appreciation may have depressed milk product prices. From a supply perspective, the global response to the high prices recently witnessed was pronounced as uneven. Source: Food Outlook - Global Market Analysis, Food and Agricultural Organization (FAO), November 2008 (

3 Housing, water, electricity, gas and other fuels This category has registered an increase in prices of 11.55% at the national level, 11.04% in Male and 12.87% inatolls. The main reasons for this increase in prices in Male are the increase in housing rents in Male by 11.15% as well as the increase in average prices of petrol & diesel prices in the country by 15% and 18% respectively in The prices of both 1 room and 2 room apartments more than doubled over the past 3 years. One of the main reasons behind this huge increase is the demand created due to the large influx of people into the capital Male. According to the projected local population in Male shows an increase of 4%compared to census 2006 can be further aggravated by the large number of expatriate workers residing in Male. Annual Average Prices (in Rufiyaa) room apartments room apartments Mrf Fig 4: Changes in fuel prices, Over the past 6 years prices of petrol and diesel has been increasing in the country until late In January 2002, price of petrol was Rf 4.65 which by e 2008 stood at Rf15.25, the highest experiemced in the past 6 years. However, since then prices have been declining gradually and now petrol prices stand at Rf7.50. Similar effects are felt in diesel as well as kerosene. These effects are due to the price surges felt in the international market for fuel. Mar 03 May May 06 Time points May 07 May World Oil Prices 2008 $ 30 $ 25 Natural Gas and Crude Oil Spot Price $/MMBTU 2008 is a year where the world oil market experienced turmoil. Oil prices where revised 8 times during the year. $/MMBTU $ 20 $ 15 $ 10 $ 5 $ 7.84 $ The oil prices hit U.S. dollars per barrel (dpb) on Jan. 3 after crossing the threshold of 100 dpb on the first trading day th of On March 12 the price rose to 112 dpb. The underlying reason was believed to be the depreciation of US dollar. $ 00 03/03/ /01/ /01/ /29/ /29/ /30/ /03/ /02/ /02/ /31/ /30/ /28/ /30/2009 Mar 3, Mar 6, 2009 Natural Gas Oil (5.80 MMBTU / Barrel) On May 5, light sweet crude for e delivery rocketed to dpb, hitting a new intra-day record. The attack by Turkish troops on Kurdish Worker's Party hideouts along the Iraq-Iran border and lasting turbulence in Nigeria were main causes of the price hike. On e 26, crude futures surged sharply and broke the 140-dollar level for the first time as OPEC predicted oil prices to rise and Libya threatened to cut production. The oil prices continue to climb to the all-time peak of dollars on y 11, when fears of supply disruptions due to the tension in Middle East region were mounting. However, the prices tumbled quickly ever since as the dollars appreciated against major currencies and the global economic downturn has ravaged demand for energy. The prices sank to around 100 dollars in tember and further below 50 dollars a barrel in November, declining by more than two-thirds since the mid-y peak. On Dec. 5, crude oil prices plunged to dollars, the lowest in four years, after the U.S. Labor Department reported its unemployment rate rose to a 15-year high of 6.7 percent.

4 Furnishing, household equipment & routine maintenance This category has registered an increase in prices of 7.73 at the national level, 3.61% in Male and 13.38% in Atolls in The main reasons for this increase are increase in price of roofing sheets, bed and bedroom sets, sofa sets and linoleum during the year In the Atolls, items such as plywood, cement, paint, roofing sheets and kerosine prices increased during Initially, plywood were within the range of Rf85 to Rf95 within the atolls. However, by end of 2008 prices were ranging from Rf106 to Rf115. Cement, prices in January were in the range of Rf70 and Rf90. By end of the year it increased to Rf102. Paint at the beginning of 2007 was priced at Rf 185 and Rf190 which at the end of the year was above Rf253. Kerosine prices also increased in the atolls from Rf11 to Rf13 during Transport This category has registered an increase in prices of 21.13% in Male the main reasons for this increase being increase in taxi fares from Rf15 to Rf20 in November This rate has remained at Rf15 since November Furthermore, the effect of rise in petrol prices also account for the upward push in inflation in this category, however, this effect is very slight as petrol accounts for only 1% in this group weight. Petrol price increases were seen in the increases in domestic air transport in terms of increased fuel surcharges. Health Health category registered an increase in prices of 16.85% at the national level, 20.17% in Male and 13.09% inatolls in The main reasons for this large increase in prices in Male are the increase in consultation charges during the latter part of 2007 which got reflected in the whole of Price of items in the health category increased substantially in Male while the increase is not so significant in the atolls, as most of the atolls do not have private clinics and are relying to a large extent on free medical care at the atoll hospitals and health centers. Price MRf Fig 5: Price changes in doctor consultation charges, Doctors consultation charges at private hospital and clinics in Male increased. Consultation charges for a general doctor increased by about 10% and for a specialised doctor by 45%. Some medical test prices also increased by about 20% to 25% Doctor consultation fee / General Doctor Doctor consultaton fee / Specialist Weakening of US$ resulted in the appreciation of currencies of many of our trading partners, making imports more expensive as Maldivian Rf is pegged to the US$ at a fixed rate of Rf12.8 during the period. This was a factor that played in the increase in prices of imported goods during the year. Exchange Rates (Dollar/Euro) Dollar / Euro $ 1.60 $ 1.55 $ 1.50 $ 1.45 $ 1.40 $ 1.35 $ 1.30 $ 1.25 Exchange Rate Dollars / Euros 03/03/ /01/ /30/ /27/ /24/ /23/ /24/ /02/ /30/ /29/ /25/ /24/ /25/ Mar 3, Mar 6, 2009 Dollars / Euros In the early part of 2008, the dollar continued to slide as the US economy experiences mild recession with a downbeat outlook of growth in the year, as reported by IMF. Further during the same period Euro strengthened with the market expectations for ECB to raise interest rates. The euro rose as high as $ on trading platform EBS, the highest since late il and edging closer to an all-time peak of $ that was also hit inil. However, this was shortlived. The Dollar started gaining ground since mid According to CNNMoney.com, the dollar rose against the euro in early y after a government report on the labor market came in largely as expected despite persistent $ rumors that a much bleaker number was in store. According to the Chief Foreign Exchange Strategist at CMC Markets US, Mr Ashraf Laidi in a note to his client stated that The positive reaction in the dollar is largely a reflection of the expectations element rather than a fundamental element,".

5 Milk Products Lactogen Anflace S.M.A/Progress Coast Anchor Milk Nido Double Peach Cowbell Dutch Lady/Milk Pack/Small Bemoli Oil Sun Flower Oil Table 1: Comparison of average prices of selected goods and services, Products Fruits Apple Water Melon (fresh localy produced) Dates without Nuts Unit 450 Gram, tin 450 Gram/Tin 450 Gram/Tin 450 Gram/Tin 1800 Gram/Tin 1800 Gram/Tin 1800 Gram/Tin 397 Gram/Tin 397 Gram/Tin 250 Ml 2 Ltr 2 Ltr 200 Gram/pack Vegetables Mixed Vegetables Fresh Tomato Fresh Cucumber Fresh Carrot Fresh Cabbage Fresh Beans Garlic Ginger Imported Potato Yellow Coloured Dhal Imported Onion 100 Gram 100 Gram Canned Foods Canned Mixed Fruit/ small Canned Pine Apple Felivaru canned fish/chunk in oil Felivaru canned fish/chunk in brine 398 Gram 567 Gram 185 Gram 185 Gram Fish and Fish products Fasmeeru Rihaakuru/Bottled Smoked fish(valhoamas)/loose Godha/Kalhubilamas Other Tuna/Latti Reef Fish/Maaniya mas 450 Gram Other Food Products Small Bread Large Bread Butter Buns/Packed Small Buns/unpacked Chocolate crumpy Basmati Rice/prepacked Chicken sausage/packed Chicken drumstick Frozen Chicken/whole chiken/prepacked Chicken egg/imported Frozen Beef Nestum/Wheat & Honey Promina/ Banana Purity/Fruit/Secound food Fuel Kerosine Cooking Gas/excluding Transport cost Petrol 226 Gram 340 Gram 250 Gram/Tin 250 Gram/Packet 200 Ml/Bottle 1 Ltr 13 Kg 1 Ltr Air Fare International Airfare (Colombo/ Trivendrum)* Male /Gan/Male Male /Hanimadhoo/ Male Male /Kade dhoo/male Male /Kahdhoo/Male Per Person Per Person/Adult Per person/adult Per Person/Adult Per Person/Adult Call Rates International Calls Internet Charges Mobile Call Charges Per Minute Per Minute Per Minute * Average of Colombo & Trivendrum tickets

6 Movements in CPI levels in Major Categories Feb Feb Feb Feb Fig 6.2: Movements in CPI levels of major categories, , Atolls Fig 6.1: Movements in CPI levels of major categories, , Male CPI levels of almost all major categories apart from communication is seen to be increasing during the past 4 and a half years shown in the two graphs showing Male and Atolls. Communication prices have been on the decline in the country since a second provider emerged in the communications sector Fig 6.3: Movements in CPI levels of Major food categories, , National In the food group, movements in fish price is very erratic given the seasonal nature of the industry, the lowest in the category was February to March 2006 and ober 2008, the highest movement felt in the past 31 months. Milk and Cheese category is also seen to have increased in tember 2006 and have been increasing since, due to huge increases in milk products. Bread and cereals seems to be a very static line but peeking up a bit by the end of 2007 and moving up then on. Prices of commodities in the oil and fats subgroup has been increasing since early 2008 which somewhat stabilized by mid of the year. Importance of different categories in the household budget - Weight 2004 Fig 7.2: Fig 7.1: The rapid increase in food prices in 2007 which continued on in 2008 had a big impact on the household budget, as it constitutes a third of the household expenditures. Food price increase was felt to a large extent by the atoll population, who spends nearly 40% on food compared to 27% share in the case of Male. As weight of housing rents accounts for one sixth (15%) of household budget in Male, a 66% increase in rents in Male during 2007 resulted in pushing up inflation in the housing In % Fig 8: Weights of major categories Expenditure share for the different food categories varies between Male and Atolls. Fish and Fruits seems to have an equal distribution in expenditures while Meat seem to be skewed towards Male, an 80% share of the expenditure on meat and meat products is borne by Male. Fig 9: Share of food group in Male and Atolls Food and beverages consists of 33 percent of the total weights of the household expenditures of which close to 60% share belongs to atolls and 40% to Male. For housing category, 60% share belongs to Male and 40% to atolls.

7 Annex - 1 : National - Consumer Price Index and Inflation Rates by Major categories, Consumer Price Index - CPI ( e 2004 =100) Inflation Rate or % change in Consumer Price Index - CPI 1. Food and beverages Including Fish 1.1 Fish 2. Tobacco 3. Clothing & footwear 4. Housing, water, electricity, gas & other fuels 4.1 Actual rentals for housing 5. Furnishing, household equipments & 6. Health 7. Transport 8. Communication 9. Recreation & culture 10. Education 11. Hotels, cafes & restaurants 12. Miscellaneous goods & services 13. Religious activity Food and beverages Including Fish Fish Tobacco Clothing & footwear Housing, water, electricity, gas & other fuels Actual rentals for housing Furnishing, household equipments & Health Transport Communication Recreation & culture Education Hotels, cafes & restaurants Miscellaneous goods & services Religious activity Weights Jan Feb Mar May e y Nov Dec

8 Annex - 2 : Male - Consumer Price Index and Inflation Rates by Major categories, Consumer Price Index - CPI ( e 2004 =100) Inflation Rate or % change in Consumer Price Index - CPI 1. Food and beverages Including Fish 1.1 Fish 2. Tobacco 3. Clothing & footwear 4. Housing, water, electricity, gas & other fuels 4.1 Actual rentals for housing 5. Furnishing, household equipments & 6. Health 7. Transport 8. Communication 9. Recreation & culture 10. Education 11. Hotels, cafes & restaurants 12. Miscellaneous goods & services 13. Religious activity Food and beverages Including Fish Fish Tobacco Clothing & footwear Housing, water, electricity, gas & other fuels Actual rentals for housing Furnishing, household equipments & Health 7. Transport Communication Recreation & culture Education Hotels, cafes & restaurants Miscellaneous goods & services Religious activity Weights Jan Feb Mar May Nov Dec

9 Annex - 3 : Atolls - Consumer Price Index and Inflation Rates by Major categories, Consumer Price Index - CPI ( e 2004 =100) Inflation Rate or % change in Consumer Price Index - CPI 1. Food and beverages Including Fish 1.1 Fish 2. Tobacco 3. Clothing & footwear 4. Housing, water, electricity, gas & other fuels 5. Furnishing, household equipments & 6. Health 7. Transport 8. Communication 9. Recreation & culture 10. Education 12. Miscellaneous goods & services Food and beverages Including Fish Fish Tobacco Clothing & footwear Housing, water, electricity, gas & other fuels Furnishing, household equipments & Health Transport Communication Recreation & culture Education Miscellaneous goods & services Weights Jan Feb Mar May e y Nov Dec