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Transport, communication services stoke inflation

THE inflation outcome for last December’s quarter shows that underlying inflation rose sharply largely due to an increase in the prices of transport and communication services, Treasury Minister Sir Rabbie Namaliu said on Wednesday.
“In quarterly terms, the average underlying inflation (CPI less betelnut, without and price controlled items) in last December’s quarter was 3.7%, compared to the outcome of 11% in last September’s quarter,” Sir Rabbie said in a statement, when releasing the inflation rate on the consumer price index for last December quarter.
“Throughout the year’s term, the average underlying inflation (CPI less betelnut, without and price controlled items) in last December’s quarter was 4.2%, compared to the outcome of 0.4% in last September’s quarter.
“The more volatile headline inflation slowed in last December’s quarter due to a large drop on the price of betel nuts.”
According to Sir Rabbie, in quarterly terms, the headline inflation in last December’s quarter was 0.3%, compared to the outcome of 3.3% in last September’s quarter.
“Throughout the year’s term, the headline inflation in last December’s quarter was 1.3%, compared to the outcome of 5.3% in last September’s quarter,” he said.
He said in year average, the headline inflation last year was 2.9% compared to the outcome of 1.7% in 2005. This was higher than the budget forecasted of 1.7% for last year.
“Looking at the CPI expenditure groups, inflation outcome for transport and communication, clothing and footwear and miscellaneous were higher in last December’s quarter.”
In quarterly terms, Lae, Port Moresby and Rabaul recorded higher inflation outcomes while Madang and Goroka recorded lower inflation rate last December.
Sir Rabbie said despite some pressure on prices due to increased demand, in year average terms, inflation remains low, reflecting the benefits of continued sound fiscal and monetary policies.