In the most recent developments in economic updates, Maldives Monetary of Authority (MMA) revealed the country’s inflation decelerated to 2.7% in May 2021.
The rate of inflation, as measured by the annual percentage change in the national Consumer Price Index (CPI) stood at 3.3% in April.
Moreover, the reports from Maldives central bank attest that the inflation rate deceleration mainly stemmed from the drop in the price of information and communication services, which itself was due to the reduction in telecommunication prices.
On the other hand, decline of prices in vegetables and “certain types of fruits” contributed towards the downward pressure on inflation.
However, upward momentum of prices were felt with the cost hike in electricity and water supply as well as the price hike in cigarettes. The increase in the cost of electricity and water supply “mirrored the base effect of the discounts on electricity and water bills provided by the government from April to June 2020 following the Covid-19 outbreak.
Meanwhile, price on cigarettes saw the hike following the ratification of the 17th amendment to the Export-Import Act of Maldives in July 2020 which imposed additional duties on specific tobacco products.
Other consumer segments such as cost of international air transport and prices on certain dairy products had pushed the upward pressure on inflation as well.
Furthermore, the monthly percentage change in national CPI decreased to -0.54% in May 2021 from 0.0% in April.