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Rising oil prices fuelling inflation

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Cuts of pork and beef for sale at Phsar Kandal in Phnom Penh in March. Photograph: Hong Menea/Phnom Penh Post

Rising oil prices fuelled a month-to-month inflationary increase of 5.4 per cent through February and March, according to data from the National Institute of Statistics.

Factors such as sanctions on Iranian oil, as well as floods that depleted Cambodian crops last year accounted for the rise in prices felt most sharply in the cost of food, experts said.

Pork and beef prices climbed 18.5 per cent and 16.7 per cent respectively in March, data showed.

Vegetable prices rose 7.5 per cent.

The cost of gasoline rose by 14.6 per cent and overall service prices jumped by 8.5 per cent during the month.

The impact of Cambodia’s worst floods in a decade, coupled with increasing agricultural exports to neighbouring countries, have contributed to an inflation rate that has held at over 5 per cent since 2011, Kang Chandararot, an economist and president of the Cambodia Institute for Development Study, said yesterday.

“The country has signed some contracts to export more food to other countries, so this can slow down the supply in the domestic market.”

Last year, Cambodia’s average inflation rate was 5.5 per cent year on year against a 7.1 per cent economic growth rate.

Hang Chuon Naron predicted a 5 per cent inflation average for 2012 along with 6.5 per cent to 7 per cent economic growth.

To contact the reporter on this story: May Kunmakara at kunmakara.may@phnompenhpost.com

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