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November 17, 2019

Those at grassroots level vulnerable to hike in commodity prices

Commodity prices have reason markedly in recent weeks, causing housewives to grumble about household costs. Nobody wants to take responsibility for the price hike and it appears to be a chicken-and-egg problem.
Global oil prices have climbed above US $68 per barrel for the first time since December. Is it a reason for increasing commodity prices? When the crude oil market dwindled and global consumer prices were declining in 2014, Myanmar merchants and businesspeople gave a variety of reasons for sustaining price increases. Ordinary people could not enjoy the fall of crude oil prices, while businesses were enjoying lower production and transportation costs.
A salary increase for government employees was announced in March, with the new pay taking effect on April 1, the beginning of fiscal 2015-2016. The pay rise was aimed at slightly raising the standard of living of approximately 1.5 million government staff.
However, the salary hike has coincided with an increase in consumer prices. The Asian Development Bank has estimated that Myanmar’s current inflation of 6 percent is likely to increase to 8.4 percent in the upcoming fiscal year due to GDP growth and expected higher wages.
Myanmar is still experiencing electricity shortages in hot season every year when water levels decline in dams and reservoirs. The government of a neighbouring country recently announced a small cut in power bills for the hot season to reflect the lower cost of fuel used for power generation.
Only when commodity prices can be managed can the inflation rate be brought under the control. Otherwise, ordinary people will suffer imbalances between income and expenditure.
All of these factors— increasing global oil prices, electricity shortages in hot season and salary increases— might contribute to the hike in commodity prices. Authorities must find appropriate solutions to solve these problems urgently so as not to have a serious impact at the grassroots level.

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