October 2016 | Released on 13 April 2017
|* Year-ended growth|
|^ Percentage point contribution to year-ended growth|
The price of imported food still on the rise
The annual headline inflation continued rising, reflecting the implication of the amendment to the excise tax on various imported goods which became effective in July 2016. The National Reserve Bank of Tonga (NRBT) projected a 6.7% rise of the annual headline inflation rate in October 2016. However, the annual headline inflation rate rose by 6.1% in October 2016, compared a 1.3% annual deflation recorded in October 2015.
On the outlook, kava prices are likely to be on the rise for some time due to the continued shortage of supply and will contribute to drive domestic inflation higher. Additionally, with the Christmas season coming up, domestic consumption is expected to rise thus driving domestic inflation up. With world oil and food prices slowly on the rise, in conjunction with the added new customs duty since July 2016, imported inflation is anticipated to continue to rise and drive headline inflation higher. The annual headline inflation rate is therefore expected to be around 6.6% in November 2016, and remain within the NRBT’s reference range of 6-8% until December 2016 before declining to below 2%.
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Inflation Rate Archive