It was also mentioned that Seychelles which despite having a larger devaluation managed to bring down inflation to the same rate as Vanuatu. It is important to note that unlike Seychelles, Fiji’s major trading partners are Australia and New Zealand which are the major source markets for our imports of food, beverages and manufactured goods.
The strong appreciation of the Australian and New Zealand dollar over the year has exacerbated the impact of already higher import prices feeding through to domestic inflation. These explain the large difference in the inflation rate in Fiji by mid 2011 even after accounting for the VAT and electricity price increases.