Reserve Bank Governor August Letlet says food prices remain the main driver of inflation in Vanuatu, despite falling global oil prices.

Speaking during a regional economic research workshop last week, Governor Letlet highlighted that while international fuel prices have eased, domestic inflation remains high, driven largely by the rising cost of food, education, and healthcare.

“We’ve seen a significant rise in food prices, which continues to push up domestic inflation. This is something the government needs to seriously address,” said Governor Letlet. “Even though fuel prices have come down globally, the cost of providing education and health services remains high.”

He emphasized the urgent need for stronger coordination between fiscal and monetary policy to address the rising cost of living, calling for policy action that is informed by solid economic research.

“This workshop is about understanding the real impact of these issues on everyday life. Research is essential to guide effective policy, and leaders must take that research and turn it into real, on-the-ground implementation,” he said.

The workshop, supported by the Asia Pacific Applied Economics Association, also covered external risks to the economy, including global trade tensions and fuel import volatility.

In his closing remarks, Governor Letlet stressed the importance of evidence-based policymaking in strengthening the economy:

“When we embed research into our policies, we build a stronger, clearer, and fairer economy for our people.”