The rate of inflation could be a lot higher than 6 percent that has been projected by the Reserve Bank of Fiji by the end of the year as ANZ Bank economist says it could be as high as 13 percent.
ANZ Bank Economist Doctor Kishti Sen (left) says what the average consumer is feeling is way more than what the Fiji Bureau of Statistics is telling us.
He says the current Consumer Price Index or the basket of goods and services that the Bureau of Statistics measures month to month was created using the Household Income Expenditure Survey done in 2008.
He says consumer spending has changed.
Dr. Sen says there is an urgent need to update the components of the Consumer Price Index, and the weights that are assigned has to be reflective of the current average consumer and, until and unless we get that, we will not really know what true inflation is in the economy. Source: Fijivillage News.
While responding to FijiFirst MP Jone Usamate about the mitigation on the ANZ report prediction, Professor Prasad says ANZ should be very careful while making such wild projections because the methodology they used is based on the gross value added of the retail sector.
He says for their mitigation, the government allocated $50 million and paid $200 each to 227,000 students for back to school, they did not raise VAT on 22 food items and added basic medicine, they increased social welfare allowance, sugarcane farmers got higher prices, the government did not touch the income tax threshold and they also wrote off the burden of paying the TELS debt by students as soon as the government was formed.
Professor Prasad says this is a government that is concerned and aware, and has put in the appropriate mitigation measures. Source: Fijivillage News
Finance Minister Biman Prasad's Budget 2023/24 is the root cause of the unprecedented rise in the cost of living, says Labour Leader Mahendra Chaudhry.
“His 15% VAT has snatched food away from the mouths of the poor, driving thousands more to the poverty queue,” Mr Chaudhry said.
He promised to bring down the cost of living in return for the votes he got but has betrayed the very people who voted for him.
The Budget he boasts of has effectively taken from the poor to give to the rich:
- He reduced the top personal tax rate for the rich
- he scrapped the social responsibility tax
- he granted 7 year tax holiday to a foreign-owned company earning millions in profit
- He has not moved to tax dividends in the hands of the rich.
Biman's path to economic recovery is dictated by the international financial institutions. He doesn't have a plan of his own.
Mr Chaudhry said the National Economic Summit and the Fiscal Review Committee did not carry the voice of the working poor. It was dominated by businesses and the elite in society.
“Biman seems to have forgotten his previous promises to give priority to raise the National Minimum Wage and grant pay increases to teachers and other civil servants who have not had one since 2017.
"Unfortunately, he has spoken too many lies. His preoccupation now is to look after his own survival in a shaky Coalition of parties, each grabbing for themselves and their cronies whatever they can while the people and the nation take the back seat,” Mr Chaudhry said.