The cost of living continues to increase as latest statistics released by the Reserve bank of Fiji indicate that the price of various basic food items is increasing.

In a statement, RBF Governor Savenaca Narube said inflation picked up sharply in April and May to around 6 percent, attributed to supply shortages of domestic market items, the Australian drought related supply disruptions of dairy and wheat products.

Narube said the increased prices are also due to the impact of the higher fiscal and excise duties announced in March and second round effects of the oil price hikes. He said given these developments the year end inflation forecast will be revised upwards from the current 3.5 percent projection.

The RBF said while the increase in inflation is a concern, a large extent of this is unavoidable as most of the price increases are beyond their control.

Meanwhile, Fiji Retailers Association President Himmat Lodhia told Legend FM news that the effects of the declining economy and the five percent pay cut is also having a drastic effect on many businesses.

Lodhia said many businesses around the country are struggling to remain open and are operating on survival mode.