Inflation eases to 6.1 per cent: RBF

March 02, 2009 06:59:49 PM

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Inflation eased slightly to 6.1 per cent in January this year, the Reserve Bank of Fiji (RBF) says.

This is compared to 6.6 per cent in the previous month (December) and 7.4 per cent in January last year.

The RBF’s February-end economic review said the slight slowdown in January inflation was mainly strengthened by lower oil prices filtering into the transport and heating and lighting categories.

“Nonetheless, food remained the largest contributor to inflation, buoyed by higher charges for market items as a result of the recent flood,” the report said.

“In the months ahead, domestic price pressures are expected to mount given the supply constraints of market items,” it said, adding the supply of these products was anticipated to be restored by mid year.

The report added that the 2009 year-end inflation forecast remained unchanged at 4.5 per cent.

“Some of the upside risks to this forecast include the volatility in crude oil and wheat prices, and the higher-than-expected increase in costs of market items due to the recent flooding.

“The decline in taxi fares is nonetheless expected to mitigate some of these price pressures.”

Foreign reserves, on the other hand, stood at around $672.2 million, sufficient to cover 2.7 months of imports of goods.