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INFLATION is the rate of in- crease in prices over a given period of time. In Malta, it is still above the EU average. The culprit is upward pressure from food prices. According to the National Sta- tistics Office (NSO) the highest annual inflation rates in Decem- ber 2023 were in the food and non-alcoholic beverages sector – a peak of 9.5%. The NSO ex- plained that this largest upward impact on annual inflation was largely due to higher prices of vegetables. A recent report in the Times of Malta claimed that the gov- ernment was pressing retailers and importers to reduce prices of selected food items by 15%. This pressure undermines all the principles of a free competitive market. On the other hand, consider- ing the relatively small size of the Maltese market, one must acknowledge that the possibili- ty of food importers agreeing to put prices up – rather than com- pete between themselves – is not necessarily far-fetched. But this possibility should be investigat- ed by whoever is responsible to monitor an unfettered market and not by direct government interference. The Chamber of Commerce reacted to this news by alleg- ing that this meant the return of price fixing that will serve to narrow customers' choice rath- er than reducing inflation. The Chamber said that the govern- ment was trying to control the market rather than promoting competition through proper monitoring and regulation. It also pointed out that the way the government was negotiating the 'scheme' was of particular concern. Market operators were being contacted individually by the government and prodded in- to complying. The Chamber opposes any government direct intervention in the free market as a matter of principle, more so because such intervention will only stifle com- petition to the detriment of both the consumer and the provider of goods. Such interventions encourage consumers to shift their con- sumption to lower quality goods and 'will not yield the systematic control of rising costs because it does not address the roots of inflation', insisted the Chamber. While it is easy to measure the price changes of individu- al products over time, human needs extend beyond just one or two products. Individuals need a big and diversified set of prod- ucts as well as a host of services for a comfortable life. They include commodities like grains, metal, fuel, utilities like electricity and transportation, and services like healthcare and entertainment. Higher costs lead to demand for increases in wag- es – a problem that in Malta led to the creation of a system that calculates each year the Cost Of Living Adjustment (COLA). Inflation aims to measure the overall impact of price changes for a diversified set of products and services. It allows for a single value representation of the in- crease in the price level of goods and services in an economy over a specified time. Higher prices mean that one euro – in the case of the Euro- zone – buys fewer goods and services. This loss of purchasing power impacts the cost of liv- ing for the common man in the street. This ultimately leads to a slower rate of economic growth. The consensus view among economists is that sustained in- flation occurs when a nation's money supply growth outpaces economic growth. Many observers, including yours truly, had criticised the economic direction of this year's budget because in a full employ- ment situation, a budget defi- cit is necessarily inflationary. Throwing away money in such a situation could not but result in higher prices besides an increase in foreign workers. Instead of restraining econom- ic growth that depends on more imported workers, this year's budget deficit encouraged our economy to move in the other direction. The Prime Minister apparently does not understand this. He seems to think that gov- ernment interference in the free market can tame the inflation monster. He said that his government would not give up and wanted to ensure what he called 'guar- anteed stability' in the food mar- ket, and promised to continue with his efforts in this direction in line with 'the people's pleas'! This simply shows that the government prefers to flaunt its populist methods, rather than following sound economic ad- vice. But this game cannot go on for ever. At the moment, the Prime Minister apparently thinks that he will be able to postpone the torrent until after the European Parliament and the local council elections in June. He might find that the he will afterwards lose any semblance of control when it is time for the next general election. Less and less priests More than 40 laymen and lay- women in the Clogher Diocese in the north of Ireland will soon begin presiding over funeral ser- vices amid a shortage of priests. The phenomenon of the dras- tic decrease in the number of priests in Ireland was the subject of a recent Irish TV documen- tary: The last priests in Ireland. It is an absorbing documentary about the decline of what was once one of Ireland's most sa- cred institutions, the Irish cler- gy. This was followed by another programme on the decrease in the number of nuns in Ireland. Priests and nuns are getting old with practically no one to re- place them. This year, only 20 seminarians are studying at the national sem- inary in Maynooth to become Catholic priests for Ireland's 26 dioceses. Weekly Mass attend- ance, which stood at 91% in 1975, was down to 36% in 2016 according to figures from the Irish census. In the past, Ireland – like Malta – was known to be priest-ridden, suffocating under the weight of its moral guardians wearing cassocks. "We liked being patronised," says Ardal O'Hanlon, the Irish presenter of the documentary. "When Bon Jovi tells us we're the best audience in the world, we lap it up. The Church infanti- lised us. We weren't encouraged to think for ourselves. We were given a single catechism and told to learn it off by heart." 'The Last Priests in Ireland' suggests an overview of the Church today and its dwindling clergy. O'Hanlon interviewed a number of priests, including a missionary to Ireland from abroad who speaks of the lone- liness of his calling. The comparison with what is happening in Malta is too evi- dent to ignore. The influence of the Church and of its priests is dwindling in Malta as it has dwindled in Ire- land. Our Archbishop's recent state- ment that he is in favour of priests being allowed to marry was, perhaps, inspired by the dwindling number of men taking the sacred orders in Malta. The parallelism between what has happened in Ireland and what is happening in Malta is glaring. 9 maltatoday | SUNDAY • 21 JANUARY 2024 OPINION Reining in inflation Michael Falzon micfal45@gmail.com