Minister Coye, “Prices Never Go Down”

We asked Minister Coye whether he foresees the cost of essential goods going down in the near future. He explained that in the long term, prices never go back down. According to Minister Coye, there is an economic rationale for steady and sustained annual inflation. The price of fuel may fluctuate, he says, but that is due to market manipulation based on the importance of energy to any nation. Here is how he puts it.

Christopher Coye

Christopher Coye, Minister of State, Ministry of Finance

“In the long term, prices never go down. When you look at even monetary policies in developed countries, in the U.S. like once again, their baseline monetary policy in terms of inflation is that it should be roughly two percent inflation rate per annum. They are way outside of that and that is why they are trying to make these monetary policy efforts. If you have annual inflation of two to three percent, obviously that means prices will continue to go up forever. We don’t have a situation in local economies and globally of prices fluctuating up and down. They simply keep going up over time. And there is economic rationale for that, to allow that to happen. Deflation can actually create its own problem. So having a stable inflation from an economic standpoint is the preferred approach. Now, when you look at specific items, you will have specific items that go up and down and fluctuate. Over time they will fluctuate but in the short and immediate term they will go up and down. Fuel is one of those items where there is obviously a lot of market manipulation one of the other. It plays such a key role in the global economy that it is important it remains as stable as it can be and as affordable as can be.”