The Consumer Price Index, which measures inflation in the economy, decreased 3.9 percent between April 2008 and April 2009 due to lowered costs of food and fuel, according to the latest CPI which was released Friday by the National Institute of Statistics.
The CPI, which normally measures inflation by monitoring price fluctuations on a basket of goods, showed an overall drop in prices from March 2008 to March 2009 of 0.7 percent.
The most recent statistics show that overall foodstuff prices have dropped 2 percent year-on-year, which includes an 18 percent drop in the price of rice compared to last year, and a 17 percent drop in the price of pork, according to the NIS. In the same period, liquid fuels decreased by 24 percent.
But, comparing prices in April to March of this year the CPI increased by 1 percent.
The 12 month decrease in prices is due both to a drop in demand and the fact that consumer prices, particularly fuel and food, peaked in April and May of last year, said Chan Sophal, president of the Cambodian Economic Association.
Since last year both food and fuel prices around the world have dropped.
Inflation in Cambodia in May 2009 hit a record high of 25.7 percent, according to the World Bank.
“Prices were the highest in April and May last year. These prices have come and gone. And it’s also a function of supply and demand, there is lower demand than last year, for sure,” Chan Sophal said.
Last year also saw rice price speculation in Cambodia, which led to a lower supply and skyrocketing prices as demand grew, he said.
Comparing April to 18 months ago, however, prices have actually increased, he said.
Acleda Bank Vice President John Brinsden said sustained price decrease constitute deflation but the current price decreases are no surprise.
“If it continues for a few more months at a modest rate I wouldn’t be too alarmed,” he said.