Inflation drops further |09 January 2013

The drop brings the level closer to the figure of 5% projected by Finance, Trade and Investment Minister Pierre Laporte who in his December 4 Budget Address 2013 said one of the main risks facing the economy was inflation.

Fish prices increased by 0.3% in December compared with a decline of 2.8% in November, while other food prices rose by 0.4% compared with a rise of 0.3% the month before, the NBS said on Tuesday.

The two categories make up 28.8% of the basket of goods used to measure prices changes.

 There was no change in prices of non-food items during the month, compared with November, the bureau added.

Mr Laporte projected the economy will grow by 3% in 2013 from 2.7% last year.

“Despite the challenging global environment we forecast real GDP growth of 2.7% compared to 5% in 2011.

 We have recorded positive performances in most sectors of the economy, including tourism, industrial and semi-industrial fishing, manufacturing, and construction,” he told the National Assembly.

“Our biggest economic challenge today is inflation – which is largely impacted by development in international markets.

 World prices of basic commodities and petroleum products have all increased this year.

“This was exacerbated by the temporary depreciation of the Seychelles rupee in the first seven months of 2012. This caused inflation to rise to over 9%.

However, owing to a tighter monetary policy by the Central Bank of Seychelles (CBS), it has since gradually declined to 7.6% by end-October,” he said.