Devaluation takes its toll

  • 24th August 2009
  • 2009
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The full effect of the devaluation of the Fiji dollar is unleashing itself on the people particularly those with ordinary incomes, as the cost of goods and services rise sharply.

In recent weeks, people have been hit by increases in:

• Bus and taxi fares by as much as 30%
• Electricity charges
• Port charges which will result in further price increases of all imported   goods
• Food and household items

Even though the very poor are exempted from the hike in electricity tariff as low consumers of power, they will eventually be affected in increased prices of goods and services, as everyone else, when businesses pass down the increased cost of production.

The 20% devaluation effected mid-April has already added significantly to the cost of food and household items. Visitors to Fiji from abroad are shocked at what we in Fiji have to pay for a wide range of consumer goods compared to what they pay for these items in Australia, New Zealand and the United States.

The hike in Customs duty from 27% to 32% in the 2009 Budget has added to price increases on a range of household items.

“The price of everything has gone up. We cannot survive on our low wage income. The needs of the poor are being ignored. A lot of people have lost their jobs since the beginning of the year. It is hard times for us,” complained a housewife who last week was looking for casual work to support her family, her husband having lost his job as a result of the economic downturn.

Our survey has revealed widespread dissatisfaction over price increases and job losses. Businesses are down because consumer spending is at an all time low.

By the Reserves Bank’s own estimates, the worst is still to come as the RBF predicts inflation will hit a high of 9.4 % by year-end as the effects of devaluation fully take its toll.