Minister for Finance, Professor Biman Prasad says as of October 2023, inflation rate stood at four per cent, compared to 1.7 per cent, for the same period last year.
Prof Prasad said inflation is measured by the Consumer Price Index (CPI) based on a representative basket of goods and services that is purchased by the consumer with different weights.
The Deputy Prime Minister highlighted that there are 349 items in the basket that the Bureau of Statistics uses in its determination.
He said the CPI, is based on a representative basket of goods and services purchased by consumer with different weights. These include:
- Food and non-alcoholic beverages, the weight is 35 per cent;
- Alcohol, tobacco and narcotics, it is 10 per cent;
- Housing and utilities -13 per cent;
- Household furnishing, clothing, footwear – 7 per cent;
- Health and education – nine per cent;
- Transport – 14 per cent; and
- Communication and others – eight per cent.
He criticised ANZ Bank produced a report suggesting that the projected inflation for 2023 might be six per cent, which they said is understated, and is going to be 13 per cent.
Prof Prasad said this was hogwash and is quite a ridiculous suggestion from an ANZ economist because it creates a wrong impression of Fiji’s economy.
He said the methodology that they used was wrong – That was based on the gross value added of the retail trade sector and the gross value added and expenditure as a proxy for Consumer Price Index (CPI) inflation is completely incorrect.
“This method is not used anywhere in the world to measure inflation. The simple reason is that the Gross Value Added Expenditure and the Consumer Price Index measure different things and that many items which are produced and sold in Fiji, included in the retail gross value added are not part of the CPI basket,” he said.