A recent government Consumer Price Index report that measured inflation at 18.7 percent is wrong and must be recalculated, the Ministry of Planning said Tuesday.
Chhay Than, minister of planning, said that his ministry mistakenly released the inflation figures in March, and that they should have been reviewed by a steering committee made up of officials of the National Bank, and from the ministries of Agriculture, Finance, Commerce and Transportation.
“The CPI statistics are very different from reality,” Chhay Than said in a telephone interview. “The numbers were unusually high,” he said.
Earlier this year the Ministry of Planning adjusted how the CPI was calculated, taking into account a more up-to-date consumption survey of Cambodians.
The subsequent report, released in March, showed consumer prices increasing 18.7 percent from January 2007 to January 2008, a significant jump from a report released earlier last year. That report, which used an older methodology to calculate inflation, pegged the increase at 10.79 percent from December 2006 to December 2007.
In March a National Institute of Statistics analyst, who declined to be named, said the more recent report, with its figure of 18.7 percent, gave an accurate picture of how much prices have risen. The report’s methodology is normally revised every five years.
SRP lawmaker Son Chhay said on Tuesday that he was not surprised by the government’s decision to readjust the CPI, but he warned against it.
“Unless they rely on accurate statistics, they won’t be able to address the problem,” he said.
Still, he said, rising inflation is obvious.
“You just look at the market,” he said. “They cannot fool the people.”
Chhay Than said that the CPI recalculation was not political.
“The CPI needs to show facts,” he said, adding that the new methodology for calculating the CPI will be released after a meeting in May, but he didn’t know when.
Inflation has been a key problem this year for the government.
Economists say that high demand for petroleum and food have driven inflation up throughout the region.
High prices caused Prime Minister Hun Sen to ban rice exports last week. He also lifted a ban on pig imports from Vietnam and Thailand to reduce the spiraling price of pork. Earlier this week, Hun Sen also used inflation as a reason to suggest a $6 monthly wage raise for garment factory workers.
Economist Kang Chandararot, executive director of the Cambodia Institute of Development Study, said that with the concern the last CPI report created, it is important to review the material but that doesn’t necessarily require a change.
He said the 18.7 percent figure isn’t inaccurate but he said the exact number isn’t important.
“The real issue is not about the percentage of the increase. The issue is that we have an increase in prices,” he said. “You cannot hide inflation.”