Inflation Drop Does Not Guarantee Lower Prices, Warns Consumer Advocate

Jayen Chellum, Secretary General of the Consumers' Association of Mauritius (ACIM), cautions that a decrease in inflation does not necessarily translate to a drop in consumer prices. Despite the reported decline in inflation, prices for food products, medicines, and services continue to rise in the market.

Why this matters: The disconnect between inflation rates and consumer prices has significant implications for the purchasing power of citizens, particularly low-income households. If left unchecked, it can lead to decreased economic mobility and increased poverty rates.

The inflation rate increased by 5.8% from March 2023 to March 2024, compared to 11.1% for the twelve months ending March 2023. However, Chellum emphasizes, "We must understand that we are talking about a drop in the percentage of inflation and that prices will not fall in commerce." The ACIM has observed significant price hikes, particularly in vegetables, which Chellum describes as abusive price increases.

In addition to rising food costs, the ACIM notes that doctors practicing privately are charging high fees, and drug prices in private pharmacies remain elevated. To address these issues, the organization is calling for price controls or a maximum mark-up on certain products, including eggs, meat, chicken, and canned food items.

The ACIM has put forth several recommendations to help curb inflation and protect consumers. These include urging the Bank of Mauritius to intervene to limit the depreciation of the rupee against major currencies, removing the tax on canned food products widely used by the poorest, and ensuring that reductions in freight prices are reflected in the prices of imported goods.

The organization also believes that prices of gasoline and diesel in Mauritius are excessively high due to overtaxation imposed by the government. The ACIM is closely studying the situation and has not ruled out street demonstrations to maintain pressure on the government to address these concerns.

Chellum and the ACIM have raised these issues with the Minister of Finance during budget consultations and hope for measures to be taken in the next budget to tackle the rising prices affecting Mauritian consumers. As inflation remains a pressing concern, the organization continues to advocate for government intervention and policy changes to protect the purchasing power of citizens.

Key Takeaways

• Inflation rate decrease doesn't mean lower consumer prices.
• Food, medicine, and service prices continue to rise in Mauritius.
• ACIM calls for price controls and maximum mark-ups on certain products.
• Organization urges government to address high fuel prices and taxation.
• ACIM advocates for policy changes to protect citizens' purchasing power.