The political opposition and local economic analysts expressed concern Tuesday over the recent government report showing a sharp rise in consumer prices last year.
The National Institute of Statistics on Monday reported that the consumer price index rose 18.7 percent between January 2007 and January 2008. Food prices increased 24.2 percent in the same period, according to the report.
SRP lawmaker Son Chhay said that the government is not doing enough to combat the rising cost of goods.
“The reality is that the majority of people are suffering from inflation and the government has not taken serious measures to solve these problems,” he said.
As a start, Son Chhay said, the government must implement policies like a reduction in fuel taxes.
Kang Chandararot, an economist and executive director of the Cambodia Institute of Development Study, also noted that regional fuel prices are having a big impact on consumer prices in Cambodia.
While Cambodians are using more fuel these days, a positive sign of development, Kang Chandararot said that Cambodia does not produce enough goods on its own, leaving its economy more vulnerable to external forces, such as increases in the regional price of gasoline.
“[Inflation] should be of high concern,” he said.
In Channy, president of Acleda Bank, said that he was concerned over the reported increase in the consumer price index.
“I just think the inflation seems like [a] rocket,” he said, adding that inflationary pressure would lower people’s savings and purchasing power as well as decrease their ability to stimulate economic growth through spending and investment.
CPP National Assembly First Vice President Nguon Nhel said Tuesday that the government is devising solutions to slow inflation, and was well aware of its impact.
“[T]he government is aware the inflation rate is high and is taking some action,” he said.
Nguon Nhel also cited oil prices as a major driver of inflation in Cambodia and neighboring countries, but added that Cambodia will be less affected by the regional trend as soon as it is able to tap its own offshore oil reserves.
“We have to use our oil resources to slow down inflation,” he said.
To date, nobody has issued firm estimates on the amount or accessibility of Cambodia’s offshore reserves. Many experts also believe it will be years before significant revenues are derived from those reserves.
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