Maldives Monetary Authority (MMA) reports a deceleration of the country’s rate of inflation.
In their recent Economic Updates, the central bank reported that the rate of inflation, measured by the annual percentage change in the national CPI slowed down to 2.7% in May 2021.
Earlier, in April 2021 the national Consumer Price Index (CPI) reached as far down as 3.3%.
This deceleration stems from the drop in price of information and communication services reflected from the decline in the price reduction in the telecommunication sector.
On the other hand, the deceleration was contributed from the price drops reflected in vegetables as well as “certain types of fruits”.
However, growth in the cost of electricity and water supply as well as price hike on cigarettes pushed upward pressure on the inflation. The increase in the cost of electricity and water supply “mirrored the base effect of the discounts on electricity and water bills provided by the government from April to June 2020” due to the Covid-19 outbreak.
The price hike on cigarettes was the result of ratification of the 17th amendment to Maldives Export-Import Act in July imposing additional duties on specific tobacco products.
Furthermore, the upward pressure on inflation was felt due to the price bump in the cost of international air transport and the surge of prices in “certain dairy products.”
Meanwhile, MMA reported the monthly percentage change of the national CPI decreased to -0.54% in the review month from 0.08% in April 2021.