Inflation accelerates but rate remains 'acceptable'

[PHNOM PENH POST]

Consumer price inflation accelerated in February, according to the latest figures from the National Institute of Statistics, as prices for food and fuel keep rising.

In its monthly Consumer Price Index report, the NIS said prices last month rose 3.8

percent year-over-year, a bump up from the 3.3-percent year-over-year inflation seen in January.

Prices climbed 0.7 percent from January to February, the report said.

An NIS official said the limited inflation rate change was predictable given the current stability in the exchange rate between the Cambodian riel and the United States dollar. That stability has helped to keep inflation in the Kingdom in check.

“[The] recent exchange rate stability contributes to keeping the inflation rate from rising. That’s very good for our macro economy,” said Khin Song, deputy director general at the NIS.

“The rate is acceptable, as we predicted. Below 5 percent means that we are not too concerned,” he said.

Food prices rose 11.1 percent in February, compared to a year earlier, while the cost for cooking oil and fats jumped 7.7 percent. At the same time, gas for cooking soared 16.2 percent. Household water, electricity, gas and other fuels increased by 3.3 percent Gas for vehicles,  advanced 15.9 percent. Transport prices went up 5.5 percent.

The NIS’s Khin Song recognised the increase in food costs, but said that energy inflation would not have a serious impact.

“I think the small increase in the price of these products was the effect of Chinese New Year,” he said. “Although we see fuel prices increased, they did not completely impact the entire price index.”

However, Olaf Unterroberdoerster, senior economist at the IMF's Asia and Pacific department, said last week that higher fuel costs tend to spill over to other prices, notably food and transportation.