‘Misleading’-Questions Over Why Kava Is Included In The Basket, In ‘Fairy Tale Rate Of 1.5%

An Australian multinational and financial services com­pany says Fiji’s year-end inflation rate was projected at an average of three per cent.

The development on Friday fol­lowed SunBiz queries over its ear­lier position where Fiji’s inflation rate was 1.5 per cent.

“We project year-end inflation at an average of 3 per cent barring any major shocks,” Westpac said.

“Our report is developed by using terminologies from the Fiji Bureau of Statistics.”

The Bureau of Statistics is ex­pected to pen in a date next week to meet with this newspaper over such queries.

Method of calculation

Leading textile manufacturer, Per­formance Flotation Development (Fiji) Limited has since questioned the bank and bureau’s methodol­ogy of statistical calculation over Fiji’s inflation rate.

In a recent report, Westpac said Fiji’s inflation rate for February was impacted by factors that in­cluded alcohol, tobacco and narcot­ics.

Westpac later clarified that nar­cotics was in fact kava – which trading partners Australia, the United States of America and New Zealand list as a food item, not a drug.

Misleading

Regardless, the inflation rate for Fiji was a far cry from the coun­try’s major trading partners Aus­tralia and New Zealand, where in­flation hovered around 6-7 per cent.

“There is some explaining that needs to be done by the authori­ties,” PFD managing director, Mike Towler said.

“If we take their average infla­tion rate over the past 12 months to March 2023, then the inflation rate is 4 per cent; the calendar year to December 2022 was 4.3 per cent.

“The Westpac Wave report quoted the February 2023 inflation rate at 1.5 per cent, which is a bit mislead­ing as it is only for the month of February 2023.

“Their forecast for 2023 is 3 per cent on the assumption that prices will continue to come down.

“That is both brave and optimis­tic.”

The Reserve Bank of Fiji and the Association of Banks in Fiji did not respond to queries when this edition went to print.

Bureau of Stats called out

Performance Flotation Develop­ment (Fiji) Ltd (PFD), which large­ly exports lifejackets to New Zea­land and Australia, also called out the Bureau of Statistics over the calculation.

To get a better level of real infla­tion, the Bureau of Statistics need­ed to go out to ask the Fijian popu­lation about items with the most impact on daily living, Mr Towler said.

“Everyone who likes an occa­sional drink of grog will know that the price is volatile and fluctuates based on supply, quality or whether the waka is pure or not,” he said.

“But it really should not be in­cluded in the basket of items that determines our inflation rate; if it is, it needs a little more science in the calculation.

“If you take out alcohol, tobacco and narcotics – kava in this case - and education, then our real world expenses will reflect our inflation rate closer to our major trading partners Australia and New Zea­land, not the fairy tale that we are being told of 1.5 per cent.”

To read more, click on this link to access the full article and details: https://eedition.fijisun.com.fj/subscriptionplans

Story By: Frederica.elbourne@fijisun.com.fj