3% hike in commodity prices; unlikely to rise again
Many traders said they were unlikely to see any further hike in prices this year.
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By
Ahmed Naif
There have been murmurs that the increase in general GST to 8% from January 1 and the slowdown in the economy have pushed up prices of essential commodities in the domestic market. The murmurs have begun to be spoken aloud, especially on political podiums.
What kind of change has actually come about in the prices of commodities, putting the story of politicians aside?
Atoll Times has taken note of the market change in the prices of 39 items that are usually purchased for households. Compared to last year, the prices of 22 items increased in January this year. The price of 17 items was still the same as last year.
Prices rose as expected
If you buy these 39 items in one go, it would have cost MVR 1,750 in 2022. All these items are now at MVR 1,812. That's a MVR 62 increase. However, there has been a 3.5% increase in the prices of items commonly purchased at home.
The finance ministry expects inflation to rise by 3-4% due to higher GST.
According to people who spoke at some shops, prices are still likely to go up marginally in the first three months of the current financial year. This is because prices of some commodities are not rising now as the stock, which was cheaper last year, is yet to run out, they said.
"Once you get the new stock, the prices of some items may go up at times. But i don't think it's going to be too big," said a shopkeeper.
Prices of vegetables, ready-to-eat foods soar
Most of the items that have become expensive are the food of various types that are packaged or canned up in where GST is levied. Prices were highest in cheese, butter, canned tomato varieties and some vegetables. Thus:
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From per kg capsicum, MVR 6 rise
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From per kg cabbage MVR 6 rise
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Pasta sauce, from a bottle of Sanremo, 480 grams, a MVR 6 rise
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From per kg banana, MVR 5 rise
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Washing detergents, from a 1-litre bottle of SoKlin, MVR 5 rise
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Oldenburger butter, 25 grams, MVR 5 rise
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Cheddar cheese by Kraft, per 190 grams can, MVR 4 rise
Many traders said they were unlikely to see any further hike in prices this year.
Global inflation eases
The IMF’s World Economic Outlook report released on Tuesday also predicted that the rate of rising commodity prices, or inflation, will continue to decline. Inflation, which was at 8.8%, is expected to come down to 6.6% this year, the IMF said. Hence, the rate of inflation in the country is expected to come down.
Moreover, keeping the Dollar at the same level this year is a reason why prices can't remain high as the number of tourist arrivals from China has increased this year. The MVR is being maintained at MVR 17.20 - 17.05 against the US dollar. If the value of the dollar does not rise in the black market, commodity prices will not rise either.
