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Inflation fueled by rising global oil prices

Inflation fueled by rising global oil prices

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A man pumps petrol into a car at a Petronas station on Mao Tse Toung Boulevard in Phnom Penh yesterday.

Prices in the first quarter increased an average of 3.6 percent on the same quarter last year, driven largely by increases in international fuel prices, according to experts.

Price inflation in Cambodia bottomed out in late 2010, and has gradually been increasing since, according to Olaf Unterroberdoerster, a senior economist at the International Monetary Fund.

“However, at 3.6 percent on average in the first quarter of 2011, inflation has been moderate compared to Cambodia’s neighbours,” he wrote.

Vietnam’s consumer prices climbed 17.51 percent in April from a year earlier, according to figures released Sunday by the Hanoi-based General Statistics Office – the highest increase since December 2008.

The IMF forecasts Cambodia’s inflation to increase to an average of 5 percent in 2011 – from an average 4 percent in 2010 – mainly on the back of rising fuel prices, according to Olaf Unterroberdoerster.

“With inflation pressures on the rise it will be important that policy makers remain vigilant and maintain a prudent monetary and fiscal policy stance.”

Brent crude traded yesterday above US$124.30 on international markets, from below $87 one year ago.

NIS Deputy Director General Khin Song said fuel prices were a main reason behind the overall increase, though most prices remained relatively stable. The NIS-compiled Consumer Price Index  shows fuel prices were a large factor in the price rise, increasing 3.08 percent on average in the first quarter compared year on year, while prices for food and non-alcoholic beverages increased 3.87 percent in the same period.

Other large gains were the price of transport – up an annualised 5.04 percent on the first quarter – and restaurants and hotels costs up 5.66 percent.

“This quarter, the speed of inflation increased a bit, but it is not noticeable – we are on track to keep inflation under 5 percent,” said Khin Song.

Business Research Institute for Cambodia Chief Economist Suzuki Hiroshi wrote that the Consumer Price Index has been stable, though he added domestic prices would likely continue increasing in the coming months.

“I notice that prices increase a little bit [in the second quarter] – that’s seasonal,” he said. “However, I don’t think it will be higher than five percent.”

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