The annual inflation in the 4th quarter of 2021 was 5.4% for All Groups. The annual inflation rate
for the 4th quarter of previous year (2020) was -0.3%, indicating an increase of 5.7 percentage points (Figure1).

The largest contribution to annual inflation for 4th quarter 2021 came from the Alcoholic beverages, tobacco, and narcotic division, which increased in prices by – 17.5% compared to the same
quarter in the previous year (Figure 3).

Figure 2 shows the rate of annual inflation for 4th quarter 2021 for all four states increased. The highest inflation rate was recorded in Pohnpei at 6.8%, followed by Yap at 5.3%, Kosrae at 4.4% and Chuuk at 3.5%.

The high inflation rate in Pohnpei was caused by the increasing prices for the Alcoholic beverages, tobacco and narcotics division, which went up by 27.7%. On the other hand, the Transport division was the cause for price increases for Yap, Kosrae, and Chuuk — up by 13.8%, 11.8%, and 7.9% respectively.