Fact check: president's claim of falling prices

Jul 17, 2023, 8:59 AM

President Ibrahim Mohamed Solih faced criticism over remarks made about inflation while campaigning in Meemu Mulak on Saturday. But his supporters have been insisting on the truth of his claims.

Inflation is the rate of increase in the price of goods and services. There are different kinds of inflation. The most commonly used measures of inflation are the Consumer Price Index and Wholesale Price Index.

Changes in inflation in the Maldives are measured by the Maldives Monetary Authority (MMA) and the Maldives Bureau of Statistics.

What did the president say?

The president referred to opponents loudly saying that inflation is rising and the prices of goods are higher. But figures show otherwise, he said.

"...the IMF and World Bank estimated that inflation in the Maldives, the prices of goods, will increase to 5.4 percent. However, because of the right measures taken by the government this year, inflation has been maintained at 3.4 percent."

Inflation in most European countries was still at nine percent and inflation in the Maldives has been kept at a lower rate as a result of the government's positive efforts, the president noted.

"No matter how loudly you say that the prices of goods are going up, the MMA, the central bank of the Maldives, is saying that prices are now going down."

MMA's statistics

Inflation in the Maldives was -0.1 percent when President Solih assumed office in 2018. But inflation started rising with covid and the Russia-Ukraine war. In June 2021, inflation was at 0.9 percent.

Inflation kept rising and reached 5.2 percent in June 2022. That was the highest rate of inflation during President Solih's administration. Since then, inflation rose the highest in January this year. That was to 4.0 percent.

The IMF estimated that inflation in the Maldives would reach 5.2 percent this year, a figure that is 0.2 percent less than what the president said. However, contrary to the IMF's predictions, inflation in the Maldives has been falling since March. Inflation of 3.9 percent in April declined to 2.8 percent in May. The truth behind the numbers is that prices of goods are decreasing overall.

Consumer Price Index (CPI)

According to the CPI released by the statistics bureau, the average CPI in the Maldives was 97.57 percent when President Solih assumed office.

The CPI started to rise with covid. In the middle of 2021, the CPI was at 97 percent on average but rose to 99.67 percent in mid-2022.

The average CPI was 101.45 percent at the start of this year. The figure remained on a rising trend and reached 102.28 percent in April, but fell to 101.88 percent in May.

Considering specific sectors under the current administration, the price of goods and services only declined in the communication sector. Compared to 2018, the prices of food, healthcare, travel and essential public services have risen under this government.

Economy Inflation Former President Ibrahim Mohamed Solih Presidential Election 2023

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