By EDDIE OSIFELO
THE people in the Solomon Islands are still expected to experience an increase in the prices of goods and fuels.
This is despite the Central Bank of Solomon Islands (CBSI’s) expectation of a 3 percent easing of inflation due to the softening of global prices.
Michael Kikiolo, Manager Advisor Policy for the Central Bank of Solomon Islands (CBSI) stated the ongoing Russia/Ukraine war is cited as the reason for this expected increase.
Kikiolo mentioned that the fuel price is stabilizing around $11 to $12 at the moment, but going forward, the impact of the Ukraine war is expected to lead to a significant increase in fuel prices.
He also noted that there would be a pass-on effect on local components, indicating that the increase in fuel prices could affect the prices of other goods and services.
In addition, Raynold Moveni, Deputy Governor of the CBSI, provided some inflation figures.
Headline inflation increased to 9.2% in March, compared to -0.6% in 2022.
Moveni attributed this sharp increase to imported inflation affecting domestic pricing.
Domestic inflation increased to 9.1% from -3.1% in March, while imported inflation rose to 9.5% in March 2023 from 6% in the same quarter of the previous year.
Core inflation, which excludes volatile items, settled at 9.5% in the first quarter of this year compared to 2.8% in the same quarter last year.
To mitigate the negative effects of inflation, Moveni mentioned that the CBSI adopts a contractionary monetary policy.
Regarding the performance of the domestic economy in the first quarter, Moveni noted mixed indicators.
The CBSI production index rebounded by 8% due to growth in the forestry sector, specifically in logging and copra production, as well as coconut oil and mineral production.
However, commodities like palm oil and cocoa declined, continuing a downward trend observed since the second half of the previous year.
The utility sectors experienced some growth, but employment declined by 0.5% in the first quarter, based on available data.
