Inflation is not just a factor of government policy, says Deputy Prime Minister and Minister of Finance Professor Biman Prasad.
It can also be a factor caused by wage rise or “what we call wage rise inflationary prices.”
But for the most part, inflationary pressure in the Fiji market is attributed to food, Prof Prasad said as the Reserve Bank reported April’s inflation of 7.1 per cent as the “highest observed in the past 10 years”.
“If you look at imported foods, if the price of food in New Zealand goes up, in Australia goes up, our dollar value goes down, and if we’re importing from those countries, obviously the prices here will go up,” Prof Prasad said.
“So, the inflation that you’re talking about for the month of March and April, you can figure that out as an ordinary person too, how the prices in the market, prices of vegetables have gone up.
“So, if you factor that, a month-to-month inflation will show that the prices have gone up.”
He said, however, that the annual inflation rate was not so high compared to other countries.
“Even with items that have zero VAT, some of their prices have gone up. And equally, there were prices of goods as I listed in Parliament, had actually gone down.”
He said the wages and salaries in the formal sector had also gone up by 10 to 12 per cent and this was also a contributing factor to inflation.
The Government, he said, had provided respite through its income tax threshold.
“In the budget, we did not raise the income threshold. So, all those people below $30,000 are not paying any taxes.
“We didn’t touch that because we wanted to ensure that we support (lower income earners).”
In addition, support has also been provided to farmers.
“Prices for rice farmers have gone up and sugarcane farmers have had the highest ever record cane price last year and this year. So, this is all government’s effort to address the cost of living, inflation.”
