Q3 2014 Inflation Review
QUARTERLY INFLATION REVIEW
July – September 2012
Issue No. 3
The year‑on‑year inflation rate at the end of the third quarter (Q3) 2012 was 11.4% for Dili and 11% for Timor‑Leste.
These rates are in line with those recorded in the previous quarter and thus suggest a reduction in volatility
compared to 2011 and beginning of 2012. However, a persistent double‑digit rate is still high by international
standards. External factors were important drivers of Q3 inflation as international prices of oil and food increased,
while the USD weakened vis‑à‑vis our trading partners. Domestic factors also played a role, however, with a surge
in house‑building costs indicating that demand is outpacing supply of building materials.
Inflation Trend
After declining to 10.1% in March 2012, year‑on‑
with house‑building costs (e.g. plywood, cement,
year inflation in Dili gradually increased to 11.4% at
concrete bricks, iron rods, etc.) increasing by 20%
the end of Q3 2012 (Figure 1). The most substantial
compared to Q3 2011.
increase
and
Figure 2 illustrates the difference between domestic
Communication category, due to a 19% surge in
and imported inflation. The latter moderately
transport prices. Clothing and Footwear, and
increased whilst the former decreased compared to
Alcohol and Tobacco also continued their upward
the last quarter. Such a divergence between
trend; increasing by 14% and 13%, respectively.
imported and domestic inflation had not been
Moreover, the Food category, which contributes
observed since 2008 when the world food crisis led
almost 60% to the overall basket, continued to
to a spike in imported foods and thus in imported
increase at double‑digit rates (12%) mainly as a
inflation. Although the gap between domestic and
result of rising prices of cereals, roots and their
imported inflation is now narrowing, domestic
products, nuts, fruits and non‑alcoholic drinks.
inflation remains higher compared to imported
Figure 1. Inflation in Dili by Category (Year‑on‑year, in percent)
inflation.
came
from
the
Transport
$!"!!#
Figure 2. Timor‑Leste Imported and Domestic inflation (Year‑on‑
('"!!#
Year, in percent)
(&"!!#
%!"!#$
@AB#
(%"!!#
($"!!#
)("!#$
(!"!!#
)'"!#$
'"!!#
)&"!#$
&"!!#
)%"!#$
%"!!#
)!"!#$
$"!!#
("!#$
!"!!#
)*+,((#
-./,((#
-.0,((#
1.2,((#
345,((#
678,((#
9:;,((#
=::C#
G0:8DH/2#*/C#=::8I4*?#
J:.K4D:0C#=.?/HKDH/2KL#3.550H4K#*/C#34?;H74K#
M47?4*N:/#*/C#OC.7*N:/#
Q/R*N:/#
,($#
)*?,($#
15?,($# )*+,($#
-./,($#
-.0,($#
1.2,($#
345,($#
'"!#$
107:D:0#E#F:>*77:#
J:.KH/2#
J4*08D#
F?*/K5:?8#*/C#G:PP./H7*N:/#
&"!#$
%"!#$
Source: DNE & DNME
!"!#$
*+,-)!$
.+/-)!$
012-))$
Similarly, year‑on‑year inflation in Timor‑Leste
345-))$
.67+89/$:66;8$
increased slightly, reaching 11.0% at the end of Q3.
Source: DNE & DNME
The main increases came from the housing category,
National Directorate of Macroeconomics, DGPAR, Tel. +670‑333‑13‑37
*+,-))$
.+/-))$
July – September 2012
Issue No. 3
The year‑on‑year inflation rate at the end of the third quarter (Q3) 2012 was 11.4% for Dili and 11% for Timor‑Leste.
These rates are in line with those recorded in the previous quarter and thus suggest a reduction in volatility
compared to 2011 and beginning of 2012. However, a persistent double‑digit rate is still high by international
standards. External factors were important drivers of Q3 inflation as international prices of oil and food increased,
while the USD weakened vis‑à‑vis our trading partners. Domestic factors also played a role, however, with a surge
in house‑building costs indicating that demand is outpacing supply of building materials.
Inflation Trend
After declining to 10.1% in March 2012, year‑on‑
with house‑building costs (e.g. plywood, cement,
year inflation in Dili gradually increased to 11.4% at
concrete bricks, iron rods, etc.) increasing by 20%
the end of Q3 2012 (Figure 1). The most substantial
compared to Q3 2011.
increase
and
Figure 2 illustrates the difference between domestic
Communication category, due to a 19% surge in
and imported inflation. The latter moderately
transport prices. Clothing and Footwear, and
increased whilst the former decreased compared to
Alcohol and Tobacco also continued their upward
the last quarter. Such a divergence between
trend; increasing by 14% and 13%, respectively.
imported and domestic inflation had not been
Moreover, the Food category, which contributes
observed since 2008 when the world food crisis led
almost 60% to the overall basket, continued to
to a spike in imported foods and thus in imported
increase at double‑digit rates (12%) mainly as a
inflation. Although the gap between domestic and
result of rising prices of cereals, roots and their
imported inflation is now narrowing, domestic
products, nuts, fruits and non‑alcoholic drinks.
inflation remains higher compared to imported
Figure 1. Inflation in Dili by Category (Year‑on‑year, in percent)
inflation.
came
from
the
Transport
$!"!!#
Figure 2. Timor‑Leste Imported and Domestic inflation (Year‑on‑
('"!!#
Year, in percent)
(&"!!#
%!"!#$
@AB#
(%"!!#
($"!!#
)("!#$
(!"!!#
)'"!#$
'"!!#
)&"!#$
&"!!#
)%"!#$
%"!!#
)!"!#$
$"!!#
("!#$
!"!!#
)*+,((#
-./,((#
-.0,((#
1.2,((#
345,((#
678,((#
9:;,((#
=::C#
G0:8DH/2#*/C#=::8I4*?#
J:.K4D:0C#=.?/HKDH/2KL#3.550H4K#*/C#34?;H74K#
M47?4*N:/#*/C#OC.7*N:/#
Q/R*N:/#
,($#
)*?,($#
15?,($# )*+,($#
-./,($#
-.0,($#
1.2,($#
345,($#
'"!#$
107:D:0#E#F:>*77:#
J:.KH/2#
J4*08D#
F?*/K5:?8#*/C#G:PP./H7*N:/#
&"!#$
%"!#$
Source: DNE & DNME
!"!#$
*+,-)!$
.+/-)!$
012-))$
Similarly, year‑on‑year inflation in Timor‑Leste
345-))$
.67+89/$:66;8$
increased slightly, reaching 11.0% at the end of Q3.
Source: DNE & DNME
The main increases came from the housing category,
National Directorate of Macroeconomics, DGPAR, Tel. +670‑333‑13‑37
*+,-))$
.+/-))$