Rising Consumer Prices are Households’ Growing Concern

In recent weeks, consumer prices have been on a steady rise, prompting questions about whether this trend will continue through the end of the year. As families navigate the challenges of escalating costs, experts are seeking ways to assist consumers in coping with this inflationary surge.

If you have recently shopped at supermarkets, you may have noticed a significant increase in your grocery bill.

Prices across a diverse range of products, from essential food items to non-essential goods, have risen sharply due to higher transportation costs.

This price jump is having a substantial impact on household budgets.

Although the government is currently providing allowances and subsidies for certain food items to help families cope with the rising cost of living, many observers argued that these measures are inadequate.

Economist Kugan Parapen remarked that any action taken to alleviate the financial burden on citizens is welcome.

“While these allowances do mitigate the cost of living, it is clear that they will not be sufficient in the coming months.

It seems the Finance Minister is robbing Peter to pay Paul—in this case, both are living under the same roof,” he explained.

Another economist, Bhavish Jugurnath, acknowledged that significant progress has been made in recent budgets regarding minimum wage increases, CSG allowances, pensions, food subsidies, and price controls.

He stated, “The latest budget included even more targeted social measures for various segments of the population.

While these may be manageable in the short term, the growing strain on the welfare state remains a major concern.”

He also noted that in the next ten years, nearly 170,000 residents will reach retirement age, equating to over 30% of the population.

Claude Canabady, secretary of the Consumers’ Eye Association, emphasized that while government financial aid is helping the most vulnerable purchase essentials, it often falls short.

“Unfortunately, this is not always enough, as some prices continue to soar,” he said.

Similarly, Suttyhudeo Tengur, president of the Association for the Protection of Consumers and the Environment (APEC), added that the social allowances announced during the last budget presentation are merely “band-aids,” providing temporary relief for consumers.

“We need to face the reality that prices are still increasing, as evidenced by the latest hike in milk prices, particularly for infants,” he lamented.

Increased Vigilance at the Ministry of Commerce

At the Ministry of Commerce, officials stated that inspectors conduct daily inspections of businesses from Monday to Friday to ensure consumer rights are upheld.

Violations of existing legislation result in fines for noncompliant traders. This vigilance is enforced across the island and covers all types of commerce.

What Lies Ahead for Prices

Bhavish Jugurnath has indicated that the high freight costs and the ongoing depreciation of the rupee against the dollar create significant pressure on the prices of imported consumer goods in Mauritius.

“While some prices have already increased, more are expected to follow suit in the coming days. I believe we can anticipate this trend to continue in the upcoming months,” he asserted.

Suttyhudeo Tengur echoed this sentiment, adding, “Considering the international surge of the dollar, the risks for a small country like Mauritius are enormous.

Such increases will persist as long as geopolitical conflicts continue.”

Moreover, Jugurnath argued that even if these conflicts were resolved, it would still be challenging to curb the dollar’s dominance in the global economy.

Claude Canabady agreed, noting, “Clearly, prices will keep rising as long as the conflict in the Middle East persists, affecting fuel and freight costs. Unfortunately, consumers, who are at the end of the supply chain, will bear the brunt of these price hikes.”

Kugan Parapen, however, believed that the pace of price increases may slow in the coming months.

“It is quite probable that the global economy will weaken in the near future. We are already seeing signs of this in major economies such as the United States, China, and Europe,” he noted.

He added that a decline in overall demand should negatively impact inflation.

Furthermore, local analyses indicated that the rupee may stabilize in the latter half of the year, which could help maintain price levels.

Proposed Measures

1. Revising Tax Policy: Kugan Parapen argued that revisiting the government’s tax policy is essential to alleviate the burden on citizens facing rising costs.
2. “The current tax regime disproportionately favors the wealthy and capitalists. The burden falls heavily on the lower-income segments of society.
3. A rebalancing approach is necessary,” he suggested, noting that this could lead to immediate improvements in purchasing power for many.
4. Price Controls: Bhavish Jugurnath stated that price controls on additional products should be implemented.
5. The government could enforce minimum or maximum prices on various goods and services to make them more affordable for consumers. He also suggested that temporary import permits for essential goods could be beneficial in light of high freight and import prices.
6. Monitoring Businesses and Traders: Parapen argues for mechanisms to ensure that businesses do not exploit rising prices to inflate their profit margins.
7. The recent record profits of Mauritian companies over the past year exemplify this concern. “The government has remained silent on this issue,” he lamented.
8. Suttyhudeo Tengur concurred, calling for a system to monitor unscrupulous traders, recommending that the respective ministry track the prices of everyday consumer goods in their countries of origin against local prices to identify discrepancies.
9. Consumer Awareness: Jugurnath suggested creating a dedicated government website aimed at educating consumers on how to save money and shop wisely.
10. For example, by opting for alternative products, consumers might evade the premium prices associated with name brands.
11. The site should also provide information on recommended prices for essential needs.
12. Canabady proposed instilling the idea that every household should cultivate a small garden, even in limited spaces, by supplying affordable seeds and ongoing support.
13. “This will serve as a starting point towards self-sufficiency,” he asserted.

Household Impact of Rising Prices

Kugan Parapen surmised that the persistent rise in prices is leading to a broad impoverishment of households.

“For the majority, consumption is a significant portion of their budget. As such, they are acutely feeling the impact of skyrocketing prices, particularly among those at the lower end of the income spectrum,” he explained.

Bhavish Jugurnath added that families may struggle to afford the same quantity of goods and services as before.

“For instance, if grocery costs rise, families might need to adjust their budgets or cut back on other expenses,” he highlighted.

He also warned that if wage growth does not keep pace with rising prices, households will face a real decrease in purchasing power, which could affect their overall standard of living.

Lower-income households are especially vulnerable as they devote a larger share of their budget to basic necessities.

Unfortunately, Suttyhudeo Tengur pointed out that prices have been consistently rising for the past six months, leading to severe difficulties in meeting basic needs.

“At this rate, we are witnessing the impoverishment of the workforce, with all the associated risks, including theft and crime,” he warned.

Source: Defi Media