Inflation begins to gather strength in Brunei at 0.9%

Inflation begins to gather strength in Brunei at 0.9%

BANDAR SERI BEGAWAN

Tuesday, October 21, 2008

PRICES of basic goods and services in Brunei rose 0.9 per cent in August from the previous month, based on the consumer price index (CPI) released by the Department of Economic Planning and Development (JPKR).

Brunei's August inflation represents a significant uptrend when compared with monthly price changes in the first seven months of the year.

The increase in August prices is attributed mainly to the increase in clothing and footwear basket, and food and non-alcoholic beverages basket, which was 4.7 and 1.2 per cent, respectively.

On a year-on-year basis, prices in August this year were up 3.3 per cent from the same month last year.

A local economist said that one of the factors for this increase could be higher fuel prices in countries from where Brunei buys raw materials as well as flour prices.

JPKR attributed the August inflation in part to some prices reverting back to the original levels after the Mid-Year Sales which took place from June 22 to Aug 3 this year.

Household goods and services and operations also increased 1.7 per cent as a result of higher prices of floor covering, household furnishings, kitchen appliances and utensils and so on. The local economist said that the increase in clothing and footwear and food and non-alcoholic beverages is attributed mainly to external factors, such as increase in transportation, cost of raw materials and so on.

"In Brunei nearly 90 per cent of goods are imported so the price increase is not a matter of supply or demand, but mainly the cost of raw materials in other countries that contribute to the prices," he said.

The cost of food and non-alcoholic beverages in August rose 1.2 per cent over the previous month due to higher prices of flour, noodles, biscuits, fresh and frozen buffalo meat, seafood, vegetables and fruits and so on.

These price increases were the main contributing factors in the 5.5 per cent year-on-year increase for this sub-group.

Food items that recorded notable price increases were instant noodles, sawi hijau, squids, red spinach and rice flour.

"Instant noodle prices showed a 10.6 per cent increase mainly due to the increase in global flour prices," said the local economist. He added that some prices of items in the sub-group tend to go down very quickly.

Notable price drops in the food and non-alcoholic beverages sub-group were for small prawns, kangkong and long beans which dropped 6.9 per cent, 6.4 per cent and 4.9 per cent, respectively.

Transportation cost rose 0.3 per cent due to higher prices of motor vehicles, maintenance and air fares.

JPKR said that the inflation rate for Brunei Darussalam is significantly lower compared to those experienced by other countries in the region. Debbie Too

The Brunei Times