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Logo of Phnom Penh Post newspaper Phnom Penh Post - Annualised inflation rate declined in May

Annualised inflation rate declined in May

Consumer goods prices increased 4.5 percent compared to May 2009 and 0.2 percent month on month, statistics indicate.

PRICES grew an average of 4.5 percent in the Kingdom this May compared to the same month last year, pushed by rising international costs for crude oil, according to the Consumer Price Index (CPI) released Thursday.

Fuel and lubricant prices climbed 27.3 percent since May last year in the Cambodian marketplace, the largest single gain highlighted by the monthly report issued by the National Institute of Statistics (NIS).

Cambodia Economic Association President Chan Sophal said inflation’s slight year-on-year rise was largely to fluctuations in worldwide supply and demand for oil, but added that the 4.5 percent rise was not a major concern for the nation’s macroeconomic stability.

“It rose a small amount, which is normal. We will begin worrying when it reaches more than 5 percent,” he said.

Workers paid in riels faced steeper prices for items denominated in dollars, as Cambodia’s currency had been in decline since April, he added.
The riel traded at 4,256 to a US dollar Thursday, according to Ly Hour exchange. It was 1.6 percent stronger in mid-April, trading at 4,190 riels per dollar.

The National Bank of Cambodia began purchasing US $17 million of riels in April to support the faltering currency.

Its most recent $7 million sale is ongoing, with the last $1 million lot scheduled to be auction off at the end of June.

The average price for consumer goods tracked by the CPI rose 0.2 percent in May over April, the report said. Inflation in April grew 5.3 percent year on year.

Petrol provided 0.9 percent of May’s 4.5 percent year-on-year increase, according to the figures. However, prices declined 0.8 percent for petrol in May compared with April.

Ministry of Economy and Finance secretary of state Hang Choun Naron said last month that the ministry keenly tracks domestic oil prices, as they are a key factor in inflation.

“It’s a free economic market. We cannot put pressure on [vendors] to lower prices, but what we can do is suggest they keep the price low,” he said last month.

Besides fuels, other categories with growing annualised prices included food and beverages, tobacco, clothing, footwear, water, electricity, healthcare, and the cost of transport. Costs for miscellaneous goods and services also climbed 10.7 percent.

Meanwhile, prices for fresh fruit fell by 8.3 percent, compared with May last year, the largest single decline shown in the statistics. Costs for fresh fruit declined 5.5 percent in May compared to April.

Bicycles, cars, telecommunications equipment, alcohol and various vegetables also saw costs decrease compared to May 2009 according to CPI figures.

The index is made up of 259 items tracked on five different Phnom Penh markets, with prices sampled from four outlets in each market.

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