The Maldives witnessed a notable rise in inflation in June 2024, with the annual inflation rate climbing to 1.4%, up from 0.8% in May 2024. This increase reflects several contributing factors, predominantly in the food and utilities sectors.
According to the Maldives Monetary Authority (MMA), the largest contributors to the inflation rate in June were vegetables and fish, each adding 0.46 and 0.45 percentage points, respectively. The price rise in these essential food items significantly impacted the overall inflation rate, illustrating the sensitivity of the Maldivian economy to fluctuations in food prices.
Fruits also contributed to the inflationary pressures, adding 0.17 percentage points, alongside passenger transport by sea, which added 0.17 percentage points as well. The cost of electricity contributed 0.15 percentage points to the overall rate, reflecting increased utility costs that affect both households and businesses.
Other notable contributors included outpatient care services (0.11 percentage points) and dairy products (0.11 percentage points). These increases were partially offset by a decline in prices for major household appliances and passenger transport by air, which subtracted 0.10 and 0.13 percentage points respectively, and mobile communication services, which subtracted a significant 0.73 percentage points.
The monthly percentage change in the national Consumer Price Index (CPI) also showed a deceleration, decreasing to 0.7% in June from 1.5% in May. This monthly rate was driven largely by a 0.37 percentage point contribution from electricity, followed by smaller contributions from vegetables, furniture, and passenger transport by air.
The rise in inflation highlights the ongoing volatility in food and energy prices, illustrating the challenges faced by the Maldivian economy in managing cost pressures. As the country continues to navigate these economic fluctuations, the MMA’s data serves as a critical tool for policymakers aiming to mitigate inflationary impacts on the population.
The increase in inflation, particularly driven by essentials such as food and utilities, points to potential areas of concern for economic stability and household welfare. It shows the importance of strategic measures to manage supply chain disruptions and price volatility in key sectors.
