Inflation Climbs to 1.3% in Honiara

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HONIARA inflation rose to 1.3 per cent in March driven mainly by domestic inflation attributed by an increase in the cost of food and electricity charges whilst moderate growth was also realised amongst tobacco, household equipment and transport.

The rise in food prices was offset by declines in rice and sugar and confectioneries (sweets), according to official data from the Solomon Islands National Statistics Office (SINSO).

In its statistical report on the Honiara Consumer Price Index (CPI) for the month (March), SINSO says the hike was from 103.9 in February to 105.3 in March 2019.

Whilst there is a downward trend in headline inflation rate since November 2018, any rise in inflation in a given period should be a concern for government, especially ministries involved in reviewing or formulating specific sector policies such as the Ministry of Commerce’s review of the minimum wages determination and on-going tax reforms by the Ministry of Finance and Treasury.

The impact of rising inflation has implication of household budgets and spending behaviour as many workers and citizens of this country continue to endure the high cost of living. The new government, Democratic Coalition Government for Advancement (DCGA) should also consider reviewing current policies to enable competition and ensure consumer protections and safeguards are in place from unfair pricing of goods and services to allow especially low income earners to be able to cope with the high cost of living being experienced in the country.

But, releasing the report, Government Statistician, Douglas Kimi said from the 1.3 per cent rise, food and non-alcohol beverages accounted for a 0.8 per cent.

He said the main contributors to the changes were; fresh fruits with +1.5 per cent and vegetables +6.0 per cent in particular, potato and tubers with 6.1 per cent at the Honiara Central Market and non-alcoholic beverages with +0.2 per cent points.

“These offset drops in rice -0.1 per cent, and sugar and confectioneries -0.8 per cent,” Mr. Kimi stated.

The major changes in other expenditure categories include;

  • Alcoholic Beverages, Tobacco and Narcotics +0.3 per cent

The main contributor to the rise in the (this) group was tobacco with +0.9 per cent.

  • Housing, water, electricity, gas and other fuels +4.8 per cent

The change in the (this) group was driven by an increase in electricity, gas and other fuels by +15.0 per cent.

  • Furnishings, household equipment and routine household maintenance +0.1 per cent

The change in the (this) group was attributed to a slight rise in tools and equipment for house and gardens by +0.2 per cent.

  • Transport +1.1 per cent

The main contributor to the change in transport group was operation of personal transport equipment by +3.4%) and transport services +0.2 per cent.

Meanwhile, the Government Statistician said apart from the above, price movements elsewhere in the consumption basket were negligible.

“The overall annual headline inflation rate for the month of March 2019 calculated on a 3 months moving average basis was 1.3 per cent, down by 0.8 percentage points from 2.1 per cent the previous month. The corresponding inflation rates for imported and other items were -2.4 per cent and 2.5 per cent, respectively.

“The main underlying rates of inflation based on a 3 months moving average for the month of March 2019 were observed between -0.8 per cent and 1.7 per cent while the headline inflation rate was at 1.3 percent,” Mr. Kimi said.