Local inflation expected to remain in ‘double digits’ most of 2022

Pago Pago, AMERICAN SAMOA — “Local inflation reached double digits in the first quarter of 2022… recorded at 11.6%” — an increase from 9.7% at the end of the year 2021, declared the Commerce Department’s Statistics & Analysis Division in the Consumer Price Index (CPI) 1st Quarter of 2022 report — for January to March 2022.

Unlike the United States with its energy sector impact, the rise in local inflation is due mainly to annual increases in Food Group, Transportation Group, Housing Group and Education/Communication, according to the CPI report dated Apr. 26 and publicly released late last week.

DOC is forecasting the local rate of inflation to remain at double digits throughout the year and will probably lower to 6-8% at the end of 2022. Additionally, inflation should finally run down to 2-4% around the end of 2023 or early 2024 unless there is another hike in crude oil prices in the near future.

In a separate “CPI Newsletter” for the 1st quarter of 2022, gasoline by itself went up by 6.6% in the quarter.

A “point of interest” by DOC states that since the territory’s outbreak of COVID-19 community spread, most businesses have experienced a sudden set back during the start of Code Red — which was activated on Feb. 22 this year.

It also says that businesses that were impacted most were those involved in recreational activities, barbershops, the Nu’uuli Theater and other family operated services and establishments have had little to no operating hours.

(Samoa News notes that the impacted businesses were considered “non-essential” businesses under Code Red.)

According to the CPI report, the Food Group is the highest expenditure category of the American Samoa CPI registering an annual increase of 17% at the beginning of the year, while the second-largest expenditure group —Transportation is observed with an annual increase of 14.5% and third-largest expenditure group is Education and Communication which has increased by 12.3%, beating the Housing group by 0.1%.

DOC points out that these 4 groups account for 65% of local household spending this quarter. “Food usually being the top expenditure group,” it says.

Unlike the American Samoa CPI, the DOC said that the Housing Group is the largest expenditure category for the United States CPI followed by Transportation and then Food. Additionally, the U.S Bureau of Labor Statistics reported that the Energy category increased by 32%. The first major component of its increase was Fuel Oil followed by Gasoline, which is a commodity measured in the local CPI under the Transportation Group.

GROUP MOVEMENTS

DOC also provided a summary of quarterly group movements. For the Food Group — Potatoes, Corn, Eggs, Apples, Instant Coffee, and Rice have recently increased by 15% or more since last year December.

Of interest from the CPI report it that prices for restaurant dishes such as Tuna Sandwiches and Lunch Plates (BBQ) are also seen to have increased by 14%.

On the Education and Communication group, it had the second-highest quarterly increase this time by 6.8%. The main reason for this increase is the price of Computer tablets (up by 50%).

The Housing Group followed with a quarterly change of 3.8% percent caused by increases in the prices of home appliances such as toasters and freezers, cooking gas tank refills, and a 6% increase per KWH (ASPA Electricity).

Apparel registered a I% quarterly change this quarter. The few items to have registered an increase are infant  diapers, T-shirts, watches, women's accessories, and slacks.

Medical Care slightly increased by 0.2%. The overall increase was caused by a 5% increment in Non-prescription drugs.

The Recreational and Other Goods and Services groups did not significantly increase this quarter. Recreational Group registered at 0.7% and Other Goods and Services at 0.5%. These two groups were affected most during the territory's "Code Red" state.

“Not being able to fully operate under COVID-19 restrictions is a likely factor for its lack of increase,” said DOC.