Inflation rate expected to rise above forecast figures

The central bank, Maldives Monetary Authority (MMA), has said the inflation rate is expected to rise above the bank's forecast by the end of the year.

Citing MMA's financial forecasts, the Finance Ministry, in its Fiscal Strategy, said the annual inflation rate is expected to be at 3 percent by the end of this year. It said inflation is expected to be higher than previously forecast as the Russia-Ukraine war has pushed global oil and food prices to levels not seen in the past 20 years.

The report said oil and food prices are expected to remain volatile in the global market in the coming months of this year. Therefore, the price of commodities is expected to rise due to inflation in import-dependent countries like the Maldives, it said.

According to the Finance Ministry, prices have increased in the first four months of this year. While prices rose the most in the food category, a 3.7 percent rise in food prices was recorded in April.

The Finance Ministry said despite the rise in food prices, the average price of goods did not increase at the same rate due to the base effect stemming from reduced telecommunications prices by the end of 2021.