ANZ International Economist Kishti Sen has raised concerns about Fiji’s inflation rate potentially reaching 13 percent by the end of this year.

Sen’s warning comes in light of the substantial increases in prices, particularly in food and transport sectors, which are significantly impacting the average consumer.

According to Sen, the official statistics provided by the Fiji Bureau of Statistics do not accurately reflect the real experiences of consumers as they navigate supermarkets and petrol stations.

He believes that the rising cost of living has left less money in the pockets of the average consumer than official numbers suggest.

“It’s less money to go around for the other thing. So what an average consumer would be feeling is way more than what the Fiji Bureau of Statistics is telling us. And the thing is the current Consumer Price index or the basket of Goods and Services that the Bureau of Statistics measures month to month was constructed or created using the Housing Income Expenditure Survey done in 2008. That’s a long time ago. We’re in 2023. And the way an average consumer spends now is very different to what they were doing in 2018.”

Sen says there is an urgent need to update the components of the consumer Price index and the weights to better align with present-day realities.

“I don’t think it’s representative of the average consumer spending today. And what I think given how prices have increased, the weights that should be assigned to what the consumer spending should be a lot higher than what it is right now.”

Sen says businesses manufacturing food products have reportedly witnessed their production costs surge by 25% to 30% in the current year and this has been passed on to the consumers.

Contrasting with Sen’s concerns, the Reserve Bank of Fiji’s 2023 Financial Stability Review initially predicted an inflation rate of 2.8 percent before the announcement of the 2023 national budget.

However, the bank has revised its outlook upward, now anticipating an inflation rate of around 6 percent by year-end.

This revision is attributed to the imposition of higher duties and taxes as part of the national budget and the recent rebound in global crude oil prices.

We are trying to get comments from the Fiji Bureau of Statistics.