A few weeks after the 2021-2022 budget, consumers have seen price increases in several food items. Authorities attribute this price increase to higher freight rates.
However, several economic dials indicate that the depreciation of the U.S. dollar and inflation are contributing to this. According to Statistics Mauritius, inflation has reached 2.2 in this period of global pandemic.
A situation that means that the prices of several items in the trade have risen. The Mauritian consumer is paying a high price for this monetary policy.
For economist Kevin Teeroovengadum, the figures from Statistics Mauritius do not surprise him. “It is not at all surprising that inflation in June 2021 reached 5.9% and headline inflation at 2.2%. This is due to a number of issues occurring in the global market, namely the rise in commodity prices, with the price of oil reaching the $75 level with a 40% increase since the beginning of the year, the rise in the food price index and a significant increase in global freight costs,” he said.
In addition, the devaluation of the rupee against the U.S. dollar makes things even more complicated, he says. “It’s a significant increase in market basket spending. The reality is that the inflation rate for the so-called lower and middle classes of Mauritian society is much higher than the official statistics. In the global market, we also see an increase and a high inflation rate in markets such as the United States, the United Kingdom, China, India, etc. The danger is that we are entering a period of stagflation where we have high inflation, high unemployment, and moderate GDP. Growth rate. For Mauritius, it looks like we could end up in stagflation. All this to say that on the one hand, Mauritian households lose their jobs, or they have less income and on the other hand, the increase in the inflation rate will put pressure on the cost of living and the standard of living of many Mauritians,” he says.
