Consumer Affairs Minister Expresses Concerns over Impact of Cost of Living

According to a release from the Minister’s office, the upward price movement continues to be a concern not only for the general public but his Ministry as well.

“We note from a recent communiqué from the G20 meeting of Finance Ministers and observations from the World Bank and Food and Agriculture Organization that this is a major concern worldwide,” the Minister revealed.

“I am certainly concerned for the vast number constituting the working poor, who live from pay cheque to pay cheque and are finding it difficult to maintain a decent standard of living.  The truth is our inflation is largely imported.  Although we must accept that fiscal measures like VAT have impacted on some prices, prices have escalated also largely on account of price movements for many of our imports,” Harris warned.

It was also revealed by Dr Harris that the prices of dairy, grain, sugar, and edible oil have moved upwards.  The World Bank reports that the global food price index rose 15% between October 2010 and January 2011.  Corn prices surged 86% in the past year, the price of wheat went up 69% in part due to droughts and flood damages in Russia and Argentina. A World Bank assessment of commodity spike reveals that since February 2009, international food prices have risen by more than 30% and agricultural raw material prices by more that 6%.  During the same period (2009 to present) oil and metal prices have increased by 100%.

Dr Harris said the matter of the cost of living is a serious one.  “Rising prices create real stress for working people, and undermine the quality of life of our pensioners and other persons on fixed income.  For the working poor about 50% of their income is estimated to be spent on food.  So I am concerned that if prices continue this trend, the lot of the poor people will worsen.”

Meanwhile, rising food and energy prices are now a major international concern.  Price Movement attracted the attention of the recently held G20 Finance Ministers Meeting in Paris held on 18-19 February, 2011. The G20 strongly recommends greater investment in agriculture.

“I know that the World Bank and IMF are concerned.  The Food and Agriculture Organization has expressed concern.  Rising inflation is not only a threat to poverty reduction but to global growth as efforts to curb inflation like increase interest rates may constrain growth,” Harris said.

Dr Harris went on to explain that medium term response to food price movements will be to increase supply and improve the efficiencies of production and distribution.  “At home we have to conserve on energy.  Consumers should be more careful and frugal in our use of electricity, transportation, etc.  Energy prices are trending upwards.  We have to put more resources in agriculture and agri-processing thereby reducing our exposure to imports and associated volatile prices.

“Consumers must also do more comparative price analyses rather than buying out of habit.  We should not religiously buy from the same supplier when their prices are going up relative to other suppliers.  They must actively seek the best buy for their money,” Dr Harris urged.


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