Tuesday, 16 September 2008

The Ministry of Planning anticipates decreasing inflation rates

Cambodge Soir


According to its hypothesis, the expected fall of oil prices will lead to an improved situation, while the economists worry about the consequences for the disadvantaged households.

After a constant increase, month after month, until reaching 22% last August, compared to the same period in 2007, Chhay Than, Minister of Planning, expects to see the inflation rates drop throughout the Kingdom.

The Minister is basing his analysis on the decrease of the price of the oil barrel during the coming months. A barrel which reached more than 110 dollars at the end of August, to fall back under 100 dollars last week.

“Oil is a locomotive contributing to the growing inflation, but inflation follows an identical curve once it drops”, he explained to journalists who pointed out that the increase in food prices and the fall of the dollar are also factors linked to the inflation.

Inflation, affecting all Cambodian households, is penalising the poorer households in particular. Approximately 35% of the Kingdom’s population lives under the poverty threshold. According to several economical observers, the price increase could slow down the poverty reduction program and affect the economical growth.

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