Local Economy Unaffected By Rising Goods And Services Costs

0
282
cambodia consumer price index increase march
According to the National Institute of Statistics, cost of transport has increased by more than 6 percent compared to the previous year. KHMER TIMES / CHOR SOKUNTHEA

Although growth in Cambodia’s consumer price index (CPI) went up by 4.3 percent year-on-year in March, according to latest figures from the National Institute of Statistics, an expert maintains that the increase in cost of living will have minimal effect on the lives of Cambodians.

Chan Sophal, director of the Center for Policy Studies, told Khmer Times that the inflationary rate was acceptable in response to the current economic performance of the country. “The increase in CPI is not a case for alarm. Whenever, the inflationary rate which is less than 5 percent, it will not cause any problem to our economy,” he said.

“The latest CPI rate emphasises that our macro economy is good. This means that our people can earn more to afford their daily expenses while the producers are also happy as they can make profits running their businesses,” he added.

A CPI measures changes in the prices of goods and services that households consume. Such changes affect the real purchasing power of consumers. An increase in the CPI represents an increasing cost of living, which is related to inflation.

According to the NIS, the average CPI for March went up due to a 5.55 percent increase in prices for food and non-alcoholic beverages. The prices for alcohol and tobacco went up by 3.88 percent and clothing and footwear by 3.58 percent. The largest increase in prices was in transport that went by more than 6 percent. This increase, said the NIS, was mainly due to an upsurge in global oil prices at the time.

The World Bank in its latest “Cambodia Economic Update” report said inflationary pressures have been building up as a result of continued strong domestic demand led by household consumption driven by rising wages. “In particular, vehicle imports expanded at 21.4 percent year-on-year in value terms, compared with 20 percent in 2015, and diesel imports surged to 14.2 percent year-on-year in 2016, compared with 3.6 percent in 2015,” stated the report.

This article was originally published in the Khmer Times.