The Maldives Bureau of Statistics has reported a +1.11% increase in the Consumer Price Index (CPI) for December 2024 compared to the previous month, reflecting a slower rise in prices compared to November’s +2.47%. Excluding fish, the CPI rose by +1.13% in December, down from a +2.62% increase in November.
What is the Consumer Price Index (CPI)?
The Consumer Price Index (CPI) is a widely used measure that tracks changes in the average prices of goods and services over time, reflecting shifts in the cost of living. It helps assess inflation levels and provides insights into how households experience price fluctuations in everyday purchases.
The CPI includes a “basket” of goods and services, divided into categories such as food, housing, transportation, healthcare, and recreation. These categories represent typical household spending patterns. The prices of these items are monitored regularly to identify increases or decreases.
How is CPI Measured?
To calculate CPI, the Maldives Bureau of Statistics collects data from selected outlets and service providers across the country, including both Male’ and the Atolls. Price changes are compared to a base period (e.g., November 2022), which serves as a reference point.
The percentage change in the CPI over time indicates:
- Inflation: When the CPI rises, showing an increase in average prices.
- Deflation: When the CPI falls, indicating a decrease in average prices.
For example, in December 2024, the CPI increased by +1.11% compared to November, meaning that the overall cost of goods and services rose slightly. This figure provides a snapshot of inflationary pressures within the economy.
Key Price Increases
Among the sectors contributing to December’s CPI rise, restaurants and accommodation services recorded the sharpest increase, at +8.90%, driven by higher cigarette prices in restaurants and cafes (+28.32%), as well as increases in coffee (+1.90%) and areca nuts (+3.05%). Over the year, this sector has risen by a significant 25.67%.
Tobacco and areca nut prices also surged by +10.03%, with cigarette prices climbing +11.15%. Over the twelve months until December, the sector recorded a dramatic increase of 96.68%, making it the largest contributor to year-on-year inflation.
Food and non-alcoholic beverages saw a +1.16% rise, with notable increases in coconut (+21.16%), onions (+13.10%), and potatoes (+10.21%). However, this was partially offset by price drops for tuna (-2.69%), bananas (-3.88%), and mangoes (-4.26%).
Other notable increases:
- Transport costs rose by +0.26%, driven by a +3.53% rise in international airfares.
- Fish prices climbed +0.65%, with reef fish and smoked fish prices increasing, though this was balanced by declines in tuna and frozen seafood prices.
- Personal care products saw a modest rise of +0.39%, reflecting higher prices for perfume (+1.44%) and deodorants (+2.46%).
Key Price Decreases
Some categories experienced price reductions, notably housing, water, electricity, gas, and other fuels, which declined by -0.47%, attributed to falling electricity (-2.28%) and water supply (-0.69%) costs.
The information and communication sector recorded a -1.22% decrease due to lower mobile communication service charges (-3.73%), while clothing and footwear fell slightly, by -0.06%, led by cheaper men’s shirts (-2.62%).
Regional CPI Differences
In Male’, the CPI rose by +0.92%, with the largest increase in the restaurant and accommodation services group (+11.71%), driven by a +50.00% surge in cigarette prices in cafes. Mobile service price drops (-3.73%) contributed to a -1.28% decline in the information and communication category.
In the Atolls, the CPI increased by +1.39%, with the tobacco and areca nut group (+16.80%) as the biggest driver, alongside electricity price reductions contributing to a -1.35% decrease in housing-related costs.
Year-on-Year Overview
The CPI rose by +4.80% for the year ending December 2024, compared to +4.05% through November. The increase was most pronounced in the tobacco and areca nut sector, which surged by +96.68% over the year, with a more moderate decline in the information and communication sector (-4.71%).
