The price of goods in the capital increased by 3.7 percent last year, with sharp

rises recorded in some foodstuffs. That is according to the government's recently

compiled consumer price index (CPI), which takes into account price movements in

food, clothing, rent, utilities, medical care, transport and education.

Inflation in food, which makes up two-fifths of the CPI basket, was 3.97 percent.

That figure was boosted by a 7 percent jump in the price of rice, and sharp increases

in the price of meat and poultry (up 11 percent) and fish (up 18 percent). All are

staple foods.

Housing and utilities, which make up another third of the CPI, increased 7 percent.

The bulk of that was accounted for by rent, which climbed 9 percent. Water and electricity

costs remained constant.

Zia Abbasi, an advisor to the National Institute of Statistics (NIS), said the inflation

rate was within the expected range for a developing country.

"Overall you have inflation fluctuating between 2 percent and 3 percent in a

low inflation country," he said. "This is nothing significant."

He said the main reason behind the jump was the severe weather conditions seen last

year.

"Fish production and rice production were low because of the drought and flood,

and this pushed the prices up," explained Abbasi. "These two [items] have

a significant impact on the overall CPI."

The rise in rice and fish was partly offset by declines in the price of fruit (down

6 percent) and vegetables (down 15 percent). Prices were also lower for clothing

and in the entertainment sector.

Khin Song, the head of the index bureau at the NIS, said even though inflation was

low, he was still concerned that any increase could harm the poorest.

"Inflation is not good for the economy," he said. "When the prices

in the market increase it is not good for the people, because it makes it difficult

for those with small incomes to buy the things they need."

Song said the boom in the garment industry had cut the price of clothes and shoes

by 5 percent.

"In Cambodia we have factories making lots of clothes," he said. "The

price of clothes imported from Thailand has gone up, but now a lot of clothes on

the market have been made in Cambodia."

Cheap imports of electronic goods from Thailand and Malaysia also helped consumers,

Song said, but stressed it was sometimes difficult to give precise reasons for all

fluctuations.

"In Cambodia, [the price] is up to the seller, and it is difficult to analyze

the exact cause of price rises," he said.

Transport, worth around one-tenth of the basket, was up 4 percent. Medical care saw

a small increase of 1.4 percent, whereas costs associated with education fell by

2.9 percent.

Abbasi stressed the figures were representative of just 8 percent of the country's

population, as the CPI only used figures from five markets in Phnom Penh.

Although there is no inflation index covering rural areas - where 85 percent of the

population lives - Abbasi said the NIS was working to produce figures for five provincial

towns. Those results are expected next month.

"Eventually we will produce [an urban CPI] and it will give us a much better

indication of urban inflation," he said.