Polye: Govt will monitor inflation

National, Normal

The National, Wednesday July 31st, 2013


THE Government will continue to monitor inflation to maintain price stability and economic growth.

Treasurer Don Polye said in a press conference yesterday that inflation has risen in all major urban centres: Rabaul (up 2.5%), Lae (up 2%), Port Moresby (up 1.6%), Goroka (up 1.1%) and Madang (up 0.1%).

He said the inflation rise in the quarter was due mainly to continued increase in the average prices of drinks, tobacco and betel nut, which rose by 7.3% in all centres.

Polye said the high betel nut price was seasonally-driven while the prices of cigarettes and tobacco were driven by increased excise tax.

He said prices also increased in other major expenditure baskets – clothing and footwear (up 1.8%), household equipment and operation (up 0.5%), rental, fuel and power (up 0.3%) and transport and communication (up 0.2%).

He said in contrast, the average prices of the miscellaneous and the food groups declined by 7.1% and 0.7% respectively.

He said the increases in the expenditure baskets were driven by a slight increase in process of fuel and electricity, which rose by an average of 0.5%. The increases in the process of these expenditure items offset the declines in the prices of miscellaneous and food items which declined on average by 7.1% and 0.7% respectively.

“The decline in prices of miscellaneous group was driven by the fall in cost of entertainment cultural goods and services which largely reflected the declined in cost of education,” Polye said.

A decline in the prices of food items (fruits and vegetables) reflected a slight decline of 0.9% in the process of other food items, Polye said.