Inflation rises 1.8pc in June

Photo by: Tracey Shelton
A shopper pays for groceries at Lucky Supermarket in Phnom Penh. Food prices have climbed – along with the price of fuel – which contributed to 1.8pc CPI inflation last month, the government said.

The Phnom Penh Post
Friday, 10 July 2009
ROS DINA

Latest consumer price index data show inflation is picking up steam following May’s 1pc increase, a trend the government blames on food and fuel prices

THE cost of living in Phnom Penh rose 1.8 percent in June compared with the previous month, the government's latest consumer price index (CPI) figures show.

The figure was an increase on the previous month, when prices increased 1 percent, according to government data.

San Sy Than, director general of the National Institute of Statistics (NIS) at the Ministry of Planning, said the rise was due to higher food and fuel prices.

His deputy, Khin Song, said the increase ought not to raise concerns.

"The reason for the rise is because we are in the season when fishing is prohibited," Khin Song said, adding that food prices always increase during the fishing ban of June to August.

Khin Song said food prices tend to drop once the fishing ban expires at the end of August. And he predicted that food prices would not climb higher than they had last year.

The NIS figures showed that petrol prices were up almost 8 percent on the month, which caused transport prices to climb 3 percent. Despite the climb, petrol still costs one-third less than it did a year ago when it hit 5,700 riels a litre.

The other category item that drove the monthly cost of living figure higher was food, which was 2.3 percent higher overall.

The food basket was more expensive due to a rise in the cost of vegetables (up 5.9 percent), rice (3.4 percent), and bread (3.3 percent). The price of fish climbed 6.2 percent.

Khin Song said that was no surprise since vegetables and rice typically cost more in the rainy season when most farmland is flooded.

The monthly increase means that the cost of living is still 4.9 percent lower than in June 2008, a slight narrowing of the 5.7 percent lower figure recorded in May.

Economist Kang Chandararot, the president of the Cambodia Institute of Development Study, said the rise in the cost of foodstuffs would be seen by some as good news.

"This is a good sign for the economy, especially for farmers who still have rice and vegetables in stock available to sell," he said. "It indicates that their hardships are gradually easing."

The CPI for June was 131.8 when measured against the base figure of 100 calculated for October-December 2006. June's CPI is down from June 2008, when the CPI was 138.5.

The index was driven lower during that period by declines in the price of rice (down almost 19 percent over 12 months) and pork (down 15 percent).

The CPI is made up of a weighted basket of 259 household items costed in markets in the capital. The items include food, drinks, fuel, electricity, clothing, rent and telecoms.