The Maldives rate of inflation turned positive during the second quarter of 2021, registering 2.3% in comparison with the negative -0.7% in the first quarter.
Furthermore, Maldives Monetary Authority (MMA) in their Quarterly Economic Bulletin reports that the upward pressure of the inflation had been exerted due to the increase in the cost of electricity, driven by the state’s initiative alleviate the impact of Covid-19 on households and businesses.
On the other hand, the cigarette prices had experienced an upward movement following the amendment to the Export-Import Act during July 2020, boosting import duties on tobacco.
Moreover, the increase in the cost of water supply, increase in the cost of the international passenger air transport, hike of prices in dairy products had further contributed towards the upward inflationary pressures.
However, the inflation pressure has not been upwards exclusively, as price reductions were felt in areas such as information and communication services, price drops in vegetables, housing rent as well as household appliances.
It was reported that electricity exerted the highest pressure to the inflation, with regards to the categories under the Maldives Consumer Price Index (CPI), with an increment of 44.4% felt during the review quarter.
Furthermore, MMA reports that this upward pressure was felt due to the state’s decision to discontinue discounts provided by the government during the review quarter.
Other major categories that reported upward pressure include the price of cigarettes which had recorded an annual growth of 40.5% during the second quarter. Meanwhile, water supply category under the CPI had reported an annual growth of 28.6% during Q2-2021.