More than 80% of Vincentians have cut back on food – Survey

IF THE responses of over 500 Vincentians to a recent survey are to be considered instructive, Vincentians are distressed about the spiking inflation and very concerned about the rising prices of food and fuel among other things.

The survey was done ahead of a public discussion on Inflation in St Vincent and the Grenadines, held on June 28 at Frenches House.The discussion included presentations by politician and economist Luke Browne and financial economist and Pro Vice Chancellor of the University of the West Indies, Professor Justin Robinson.

Responding the findings of the survey, Professor Robinson said that it is possible that the level of anxiety being experienced by Vincentians is because the rapid spike in inflation has come after a sustained period of low inflation.

“Maybe one of the reasons why we are reacting this way to this spike in inflation is that we have gone through almost a 13-year period of relatively low inflation,” he said.

He noted that a look at the drivers of spikes in inflation in this country will show that it is usually tied to external forces, with an almost dance-partnership with United States’ inflation situation. The exception to this was in 1980, 1988 and 2008, when inflation rates exceeded those of the US.

He said a study of those years, providing an informed explanation to that anomaly could be a very interesting undertaking.

The general consensus is that worldwide inflation is directly linked to the Russian invasion of Ukraine in February of this year and according to Professor Robinson, few persons, admittedly, including himself really understood how big a player the Ukraine was in the world food production chain.

Before Russia’s invasion, Ukraine, a major corn and wheat producer, exported upward of six million tonnes of grain a month, which has dwindled to about one million tonnes per month, triggering grain shortage concerns and rising prices worldwide.

Professor Robinson also expressed concern that 82 per cent of those surveyed said that the hike in gas, electricity and food prices have caused them to cut back on some basic food items, as many are paying over $200 more for the same quantity of grocery items that they bought before the crisis began to evolve.

“It is certainly beginning to bite,” he lamented.

He however expressed hope that the government will find ways to ease the burden on the population, as the economics of inflation show that governments can expect some degree of a windfall from goods and services.

He said a recent International Monetary Fund survey showed that the most dominant response by governments around the world was to reduce to some consumption taxes, to give some relief to the wider population.

He said that while the government also has to balance the fact that it too has to pay more as a consumer to conduct government business, it has to decide “how much of the windfall will be shared to provide ease.”