Page 12 - Food Inflation in Southeast Asia 2

Stable food security
Between April 2020 and April 2021 (13 consecutive months) and April 2022 and December 2023 (21 consecutive
months), the inflation rate in the CFPI surpassed that of the General CPI (on a year-on-year basis). These two periods
align with the global onset of the COVID-19 pandemic and the Russia-Ukraine war, respectively. As a result, one can say
that international supply chain disruptions influenced domestic food inflation, as the country depends on food imports,
as previously mentioned.

Key findings
Based on the above-mentioned observations in the present paper, the following conclusions can be made:

Stability of Brunei's CFPI
 Brunei's CFPI has been more stable compared to other Southeast Asian countries, with a less steep slope in its
movement.
 This indicates a relatively consistent food price inflation trajectory over time.

Brunei's low CFPI inflation
 Over most of the period from January 2001 to March 2024, Brunei's CFPI inflation rate has remained lower than that
of other Southeast Asian countries and the regional average.
 The variation in Brunei's CFPI-based inflation is also less than in other countries.

Brunei's CFPI and General CPI correlation

 Brunei's CFPI and General CPI have closely tracked each other, showing a high correlation over time.
 However, since around 2017, the gap between CFPI and CPI has widened, with CFPI rising faster than CPI,
particularly from 2020 onwards, likely due to global supply chain disruptions affecting food imports.

Periods of CFPI exceeding General CPI:
 Brunei experienced periods when its CFPI inflation exceeded that of its General CPI, including during the COVID-19
pandemic (April 2020 - April 2021) and the Russia-Ukraine war (April 2022 - December 2023).
 In total, there were multiple instances over the last 23 years where CFPI-based inflation outpaced General CPI
inflation, particularly during global disruptions or crises.

Brunei's inflation stability despite global volatility:
 Despite being a food-importing country, Brunei has shown more stability in food prices than the FAO Food Price
Index, with less volatility in its CFPI movements.
 This stability can be attributed to government interventions, such as food subsidies and the Price Control Act (CAP
142), which help mitigate fluctuations in food prices.

Impact of global events on food inflation:
 The sharp increase in Brunei's CFPI during 2020-2021 and 2022-2023 aligns with global disruptions in food supply
chains, highlighting the country's reliance on imports and the vulnerability of food prices to international crises like
the COVID-19 pandemic and the Russia-Ukraine war.

12 THE CHALLENGE OF FOOD INFLATION IN SOUTHEAST ASIA