Brunei Sept inflation tame versus Asean peers

Brunei Sept inflation tame versus Asean peers

DEBBIE TOO
BANDAR SERI BEGAWAN

Thursday, November 20, 2008

INFLATION eased a minuscule 0.3 per cent in September from August, but jumped a hefty 3.1 per cent from the same period last year.

The Department of Economic Planning and Development said one of the main reasons for Brunei's significantly low inflation rate compared with other Asean countries is the government's subsidy on rice and sugar, petrol and diesel, and liquefied petroleum gas.

The state subsidy moderated the consumer price index for the indices for food and non-alcoholic beverages, transport, housing, water and electricity and maintenance.

The department cited Brunei's low electricity and water tariff, the minimal medical consultation fee of $1 and regulated prices of new motor vehicles and infant powdered milk for contributing to the low inflation.

While most of the prices of the major groups remained unchanged, one notable drop in price was seen in clothing and footwear, which dropped by five per cent from the previous month.

According to the report from the department, cheaper prices of ready-made clothing, material for both men and women, including footwear, during the Brunei Grand Sales led to the decline.

An economist who wished to remain anonymous said that this would normally happen after major sales.

"People would buy less and so you see shops lowering the cost of their clothing to maintain their business."

Small prawn, cucumber and ikan puteh prices posted significant price increases, which contributed to the food and non-alcoholic beverages group's increase of 0.7 per cent.

Prices of small prawns rose 20.9 per cent, cucumber prices by 13.7 per cent and ikan puteh by 12.6 per cent.

The local economist said this was mainly due to a large number of businesses and households who were making prawn purchases to prepare for the Hari Raya festivities.

"When a large group of businesses or individuals start buying up prawns, the market will have a lower supply and when there is a low supply of something but the demand is high, the price increases," the economist said.

Notable decreases in the same category of goods include cauliflower by 11.7 per cent and wheat flour by 8.9 per cent.

In other groups, the cost of household goods, services and operation fell by 0.9 per cent as a result of cheaper prices of furniture, floor covering, household furnishings, among others.

The Brunei Times