Domestic prices cause headline inflation to rise
- Details
- Category: Economic Releases
- Created: 05 August 2015
| Inflation June 2015 |
||||
| Jun 15 | May 15 | Apr 15 | Mar 15 | |
| Headline * | 0.2 | -0.6 | -1.5 | -4.0 |
| Domestic ^ | 2.6 | 1.3 | -0.2 | -2.4 |
| Imported ^ | -2.4 | -1.9 | -1.3 | -1.7 |
| Underlying * | 7.8 | 5.3 | 2.8 | -1.5 |
| * Year-ended growth | ||||
| ^ Percentage point contribution to year-ended growth | ||||
Domestic prices cause headline inflation to rise
Over June, CPI fell by 0.7% as a result of low Imported and Domestic prices. Specifically, Imported and Domestic prices dropped by 1.0% and 0.2% respectively. In particular, lower prices for Food drove Imported inflation down. The Tongan Pa’anga appreciated against the New Zealand Dollar which could have contributed to the low imported food prices. Additionally, the fall in Domestic inflation was caused by a decrease in Household Supplies & Services prices.
After four consecutive months of headline deflation, the inflation rate was 0.2% over the year to June. This was due to a 6.6% increase in Domestic prices which offset a 4.1% decline in Imported prices. Food prices increased over the year which more than offset a decline in Household Operation and Transportation prices. Higher prices for food items, namely Fruit & vegetables and Meats, fish & poultry contributed to a 21.5% increase in Domestic Food prices whereas the same food items drove Imported Food prices down by 4.3%. Contrastingly, Domestic Fuel & Power prices fell over the year resulting in lower Household Operation and Transportation components. Furthermore, the annual core inflation rate (excluding energy and imported food) increased by 7.8% indicating the significant influence global prices has on inflation.
On the outlook, the NRBT continues to expect that headline inflation will remain low until the end of this calendar year. However, recent developments in world oil prices could alter the current forecast. The NRBT will continue to closely monitor the country’s economic and financial conditions in order to maintain and promote economic prosperity.
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Inflation Breakdown *
| Weight |
Month-ended | Year-ended | |||
| Change | Contribution to total ppt |
Change | Contribution to total ppt |
||
| % | % | ||||
| CPI | 100 | -0.6 | -0.6 | 0.2 | 0.2 |
| Domestic | 42.2 | -0.2 | -0.1 | 6.6 | 2.6 |
| Food | 17.8 | 0.9 | 0.2 | 21.5 | 3.6 |
| Fruit & vegetables | 6.5 | 1.4 | 0.1 | 63.1 | 3.7 |
| Meats, fish & poultry | 3.7 | 1.5 | 0.1 | 3.5 | 0.1 |
| Dairy farm, vegetable products | 0.5 | -2.9 | 0.0 | -3.7 | 0.0 |
| Cereals & cereal products | 3.4 | 0.0 | 0.0 | -4.1 | -0.1 |
| Other food | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Drinks, sweets and meal away from home | 3.7 | 0.0 | 0.0 | 0.0 | 0.0 |
| Transportation | 0.5 | 0.0 | 0.0 | 0.0 | 0.0 |
| Tobacco & Alcohol | 1.5 | 0.0 | 0.0 | 0.0 | 0.0 |
| Household Operation | 17.3 | -1.7 | -0.3 | -6.0 | -1.0 |
| Domestis Power & Fuel | 6.0 | 0.0 | 0.0 | -12.5 | -0.8 |
| Household Appliances | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Household furniture & furnishing & textiles | 1.4 | 0.0 | 0.0 | 2.0 | 0.0 |
| Household supplies & services | 4.7 | -6.2 | -0.3 | -6.2 | -0.3 |
| Communication services | 5.2 | 0.0 | 0.0 | 0.0 | 0.0 |
| Clothing & Footwear | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Housing | 1.7 | 0.0 | 0.0 | 0.0 | 0.0 |
| Miscellaneous goods & services | 3.5 | 0.0 | 0.0 | 0.0 | 0.0 |
| Imported | 57.8 | -1.0 | -0.6 | -4.1 | -2.4 |
| Food | 27.9 | -2.9 | -0.8 | -4.3 | -1.3 |
| Fruit & vegetables | 0.9 | -2.6 | 0.0 | -1.2 | 0.0 |
| Meats, fish & poultry | 14.6 | -5.6 | -0.9 | -9.1 | -1.5 |
| Dairy farm, vegetable products | 3.2 | 0.6 | 0.0 | 2.2 | 0.1 |
| Cereal & cereal products | 3.5 | 0.5 | 0.0 | -1.5 | -0.1 |
| Other food | 5.7 | 0.3 | 0.0 | 3.7 | 0.2 |
| Drink, sweets and meal away from home | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Transportation | 11.5 | 2.3 | 0.2 | -12.5 | -1.5 |
| Private | 8.6 | 3.1 | 0.2 | -16.1 | -1.5 |
| Public | 2.9 | 0.0 | 0.0 | -0.5 | 0.0 |
| Tobacco & Alcohol | 4.5 | 0.6 | 0.0 | 7.2 | 0.3 |
| Tobacco | 2.9 | -0.7 | 0.0 | 10.5 | 0.3 |
| Alcohol | 1.6 | 3.1 | 0.0 | 0.7 | 0.0 |
| Kava | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Household Operation | 3.5 | -0.4 | 0.0 | -5.5 | -0.2 |
| Domestic Power & Fuel | 1.1 | -1.3 | 0.0 | -16.7 | -0.2 |
| Household Applicances | 1.2 | 0.0 | 0.0 | 1.6 | 0.0 |
| Household furniture, furnishing & textiles | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Household supplies & services | 1.2 | 0.0 | 0.0 | -1.0 | 0.0 |
| Communication services | 0.0 | 0.0 | 0.0 | 0.0 | 0.0 |
| Clothing & Footwear | 3.2 | 0.0 | 0.0 | 8.2 | 0.3 |
| Housing | 0.8 | 0.3 | 0.0 | -0.1 | 0.0 |
| Miscellaneous goods & services | 6.4 | 0.1 | 0.0 | -0.2 | 0.0 |
| Underlying CPI measures | |||||
| Ex. Energy ** | 81.4 | -1.1 | -0.9 | 3.3 | 2.7 |
| Ex. imported food | 72.1 | 0.2 | 0.2 | 2.1 | 1.5 |
| Ex. energy and imported food | 53.5 | -0.1 | -0.1 | 7.8 | 4.0 |
* Due to rounding and Tonga Department of Statistics errors some data may not aggregate precisely
** Excluded from the 'Ex energy' index is imported transportation and 'domestic fuel and power' component of 'Household operation'.
Source: Tonga Department of Statistics
Download a copy of the Inflation Rate Report for Jun.
