As the National Budget 2024/2025 was passed, the Minister of Finance, Lautimuia Uelese Vaai explained why the price of goods such as chicken increased despite a drop in inflation. 

The annual inflation rate remains elevated but gradually decreased to 5.9 per cent in March 2024 from a high of 12.0 per cent in June 2023.

Several members of parliament queried the Government to explain how inflation reportedly dropped but the prices were still high. 

Speaking in Parliament on Thursday night during national budget debate, Lautimuia said the inflation is calculated using the Consumer Price Index (CPI). 

He noted the CPI contains the price list of 163 commodities; 50 per cent of them were local goods and 50 percent imported. 

Lautimuia said the formula of calculating inflation is the average price of all the commodities in CPI list and the formula is used worldwide. 

“The price for goods in the 163 commodities show that some goods are high and others are low,” he said. 

“The low price goods offset the price for the higher ones…it is correct that some of the prices for these goods are high.” 

He gave a breakdown for the price of lamb neck per kilo that was $23.84 in April 2022, $26.30 by April 2023 and dropped in April 2024 $23.07 noting a decrease of 12 per cent for the period. 

For chicken per kilo; it was $5.40 in April 2022, in April 2023 it went up to $6.37 which was an increase of 26 per cent and in April 2024 it went up to $7 which is an increase of 9.9 per cent. 

Another example used by the Minister was turkey wings which cost $12.83 in April and in April 2024 it dropped to $14.10 which is a decrease of 18.4 per cent. 

Lautimuia reiterated his point that the formula in calculating inflation uses the average price of commodities and in doing the cost of some goods will go up while others will drop. 

The Parliament approved the 2024 – 2025 financial year budget of $1.1 billion on Thursday night.