MercoPress. South Atlantic News Agency

Falklands: rise in the CPI, caused by the conflict in the Middle East

The Islands' Head of Policy, Roddy Cordeiro, warned of volatile oil prices and said the United Kingdom is already anticipating that they will give inflation a further push.

The Consumer Price Index (CPI), according to official Falkland Islands figures, recorded a quarterly increase of 3.4% as a result of the impact of higher fuel prices.

The phenomenon, as the entire world is experiencing in energy and hydrocarbons, stems from the confrontation between the United States and Israel with Iran, which has escalated into a regional conflict by disrupting maritime traffic through key straits. According to estimates from international organizations, 20% of the world's oil, 30% of natural gas and 50% of urea — a fertilizer critical to agricultural production — pass through those waters.

In the Falklands, on July 29, during his presentation to the Standing Finance Committee, the Islands' Head of Policy, Roddy Cordeiro, said international prices remain volatile for the time being, and that in the United Kingdom a further push to inflation is anticipated.

Following the presentation of the official financial report and the fuel situation, the Standing Committee became the setting for a debate over the £16 million surplus shown in the Falklands national budget toward the end of June, the second quarter of the financial year — although it is understood that payments and applications deferred to the following quarter will almost certainly reduce the size of that surplus.

The occasion was used to ask members whether they were satisfied with the amounts allocated to the budget for rural roads in Camp.

The Financial Secretary clarified that these files had been released under the information and transparency arrangements promoted by his department and by elected members.

The item was approved, though there was room for some members to joke about whether the full £1 million allocated might end up entirely spent on the construction of a single cattle grid. Similarly worded budgets were also agreed for the construction of jetties or landing stages on Speedwell and Barren islands, located off the extreme south-west of East Falkland.

The Falklands CPI is based on a basket of 175 products, which are taken to represent the consumption patterns of goods and services of the population of the capital, Stanley. It does not, however, take into account changes in consumption that may emerge as a result of price movements.