(File photo) Prime Minister Mark Brown says buying local rather than imported foods could help in the fight against inflation. Photo: Caleb Fotheringham/22050427
Everybody is feeling the pinch of inflation but what is it and what can be done.
At Punanga Nui market two Mamas are selling watermelon and baked goods on a slow Friday afternoon. Like everybody else in the country they’re starting to notice everything getting more expensive.
“It’s gone up, like the price in the
shops, in the outlets. I don’t know where the people who run the price control
and all that are, what is happening,” one Mama, who wished not to be named, asks.
Petrol, flour, sugar and corned beef are
what the pair list as notable price increases. They call these items “the essentials”.
But they say they’re not planning to
combat the cost of living by putting their prices up.
“For us it’s just affordable, we think
about the others too, you know the fairness.
“We support the locals, so we will just
leave it there.”
Inflation has become a global problem,
supply chain issues triggered from the pandemic coupled with oil shortages from
sanctions on Russia has driven up prices.
Inflation can be defined as the general
increase in the prices of goods and services over time. It means that money is
losing value – a dollar 20 years ago could buy you more than a dollar today.
In the Cook Islands inflation is measured
through the consumers price index, which measures and compares the cost of a
fixed number of goods and services, like food, petrol and clothing.
Economists largely agree that a small
amount of inflation is positive, in New Zealand the Reserve Bank aims to keep
inflation between 1 to 3 per cent.
At the end of this financial year, the Cook Islands will have an inflation rate of 4.3 per cent according to the Ministry of Finance and Economic Management (MFEM), which means prices will be 4.3 per cent more expensive compared to a year ago.
It’s the highest inflation rate the
country has seen since the Global Financial Crisis in 2008 where it was 6.7 per
In the 2022/23 financial year the inflation
rate is predicted to be 3.9 per cent
An inflation report by MFEM says inflation is generally caused by the amount of money in circulation, and the availability of goods or services consumers need or want to buy.
“Extreme shortages of supply and extreme
spikes in demand can also send the prices of a particular good service
skyrocketing, which can affect inflation,” says the report which then compared
the current situation to the war in Ukraine.
The report says the Cook Islands is
reliant on trade and vulnerable to global price fluctuations, especially for
transport costs, building materials, fuel and packaged food.
“As a market at the ‘end of the line’ the
Cook Islands is impacted by all of those external pressures, and there is
little that can be done by Government.
“The prices that CITC and Prime Foods and
the other shops pay for goods and to transport those goods to the Cook Islands
have risen, and that means that prices here will go up too.”
Iro from the charity, Works With Faith, helps the most
vulnerable people in the Cook Islands.
Iro says people are becoming more
financially challenged as the cost of living increases.
She recently had a local businessman give
her boxes of nappies and nearly expired instant noodles to give away, which she
did on Facebook. Iro says the goods were gone in minutes to people who were
She also works on annual Christmas Box’s
and is thinking of raising extra funds for what she expects will be an end to a
“I think everyone is going to feel the
pinch,” she says.
Iro says people’s lifestyle will need to
change to adjust to prices increasing.
“Before the planes got here, we used to
live off the land and we can still do that, there is no reason why we can’t go
back to that.
“I think if we changed our ways a bit,
there is no reason for starvation here.
“The fish is free, the chickens are free,
the vegetation is free, and I know a lot of locals who do swaps, they swap a
bunch of bananas for baked goods, things like that. I think we just need to
think outside of the box and probably get back to basics.”
MFEM’s report also suggests a change in
lifestyle to limit the effect of higher prices. The first step recommended for
households was to reassess weekly budgets and try find cheaper substitutes.
“If the price of corned beef is rising
fast, but the price of pork or chicken is not rising as fast, making a switch
from corned beef to pork or chicken can provide some relief,” said the report.
“For example, while corned beef sells for
over $20 per kilo, a carton of chicken works out to a little over $3 per kilo –
and if a carton is too much chicken for our household we can share with family
The report also suggested meal plans and
avoiding impulse purchases.
The Ministry of Internal Affairs also put
out a survey on Thursday which asks 10 questions relating to inflation.
to Maru Mariri-Tepou from the Ministry’s labour and consumer services division,
the poll focuses on the weekly expenses faced by
a family in the Cook Islands.
“This covers the family’s basic needs such
as housing (rent or mortgage), groceries, transportation, power and clothing.”
says the survey informs national
policies and activities aimed at raising awareness on consumer protection,
verifying compliance with the legislation on consumer guarantees and fair
trading and improving the services in that space.