Inflation hits record 4.8% in December; highest in 9 years
Comparing to the previous year’s inflation rate of 0.9%, the current figure represents a sharp increase of 3.9 percentage points.
Bureau of Statistics has released the Consumer Price Index (CPI) report for December, revealing that inflation soared to 4.80% at the end of last year. This marks the highest inflation rate in the past nine years.
Comparing to January 2024’s inflation rate of 0.9%, the current figure represents a sharp increase of 3.9 percentage points. In 2023, inflation had already reached 4%, indicating a steady upward trend.
The CPI report also highlighted a significant monthly rise in inflation:
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December inflation: 1.13% increase
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November inflation: 2.62% increase
Several factors contributed to this record-high inflation, primarily the rising prices of tobacco products, restaurants, and fresh produce.
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Tobacco and Cigarettes: Prices surged by 11.15%, making it the biggest contributor to inflation.
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Restaurants and Cafés: Increased by 9.19%, mainly due to higher prices for coffee, cigarettes, and other tobacco products.
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Vegetables: Prices rose by 4.48%, reflecting market supply constraints.
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Fruits: Increased by 2.78%, adding to household food expenses.
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Fish: Fish commodity prices went up by 3.02%, while the price of fresh fish specifically increased by 0.65%.
Despite the overall rise in inflation, some sectors saw a decrease in prices:
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Communication services: 3.73% decrease
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Electricity: 2.28% decrease
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Water: 0.69% decrease
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Preserved food items: 0.52% decrease
The government had initially projected inflation to remain at 3.9% for this year, with expectations that subsidy changes would contribute to this figure. However, without subsidy adjustments, inflation was estimated to be just 0.8%. The current inflation rate has already surpassed these projections, raising concerns about further economic instability.
Several factors indicate that inflation may continue to rise:
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Foreign exchange constraints remain a challenge.
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Ramadan is approaching, a period typically associated with increased demand and price hikes. Inflation is now expected to surpass 5% in the first quarter of this year.
Additionally, inflation rates differ across regions:
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Atolls: 5.57%
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Male: 4.29%
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Atoll inflation (monthly rise): 1.39%
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Male inflation (monthly rise): 0.92%
