CPI FOR OCTOBER 2022
Does it feel like your dollar does not buy quite as much as it used to? Or maybe you feel that things are somewhat pricier than it used to be some time ago? This situation of increase in prices or reduction in the purchasing power of the money is what is regarded as inflation. Like GDP or unemployment, inflation too is an important measure of the state of the economy.
Inflation is a sustained rise in overall price levels of most goods and services of daily or common use, such as food, clothing, housing, recreation, transport, consumer staples, etc. Moderate inflation is associated with economic growth, while high inflation can signal an overheated economy.
Conversely, when prices generally decline across a sector of the economy or throughout the entire economy, it’s called deflation.
During deflation, economic growth begins to slow, demand eases and the supply of goods increases relative to demand. At this point, the rate of inflation usually drops. Often the result of prolonged weak demand, deflation can lead to recession and even depression.
Inflation rate is generally measured by observing the changes in the Consumer Price Index (CPI) over a period of time.
CPI measures the percentage change in the price of a basket of goods and services consumed by households.
There are two measures of inflation used in Fiji. One compares the average CPI over the past twelve months with the average CPI over the previous twelve months while the other compares the CPI in the current month with the CPI in the comparable month of the previous year.
According to latest data released by the Fiji Bureau of Statistics, the average annual rate of inflation for the twelve months to October 2022 [i.e. comparing the average CPI for the 12 months from November 2021 – October 2022; with the average for the 12 months from November 2020 – October 2021] stands at 4.2 percent while the month-on-month inflation rate [compared with October 2021] stands at 5.4 percent.
The All-Items CPI for the month of
October 2022 registered a decrease of 0.6 percent over September 2022 and stands at 117.8.
There were price changes recorded in the Clothing & Footwear, Recreation & Culture divisions, but these changes balanced out while no price changes were recorded in the Restaurants & Hotels and Education division.
Inflation sometimes can be so low that people may not pay any attention to it or alternatively it can be moderate where people notice the rising prices and change their economic behaviour accordingly.
Given the outcomes so far, the domestic economy is projected to grow by 15.6 percent this year.