Inflation trends from June- October

The year-on-year inflation rate as measured by the CPI stood at 15.8 percent in October 2016, down by 1.4 percentage points from the 17.2 percent recorded in September 2016 (Table 2). This rate of inflation for October 2016 is the percentage change in the Consumer Price Index (CPI) over the twelve-month period, from October 2015 to October 2016. The monthly change rate for October 2016 was 1.4 percent compared to the 0.2 percent recorded for September 2016. Also, the food and non-alcoholic beverages group recorded a year-on-year inflation rate of 8.7 percent. This is 0.3 percentage point lower than the rate recorded in September 2016. Seven subgroups of the food and non-alcoholic beverages group recorded inflation rates higher than the group’s average rate of 8.7 percent. The non-food group recorded a year-on-year inflation rate of 19.4 percent in October 2016, compared to the 21.6 percent recorded for September 2016. Six subgroups recorded year-on-year inflation rates higher than the group’s average rate of 19.4 percent (Figure 2). Transport recorded the highest inflation rate of 27.2 percent, followed by Education with 25.8 percent, Recreation and culture with 24.0 percent, Housing, water, electricity, gas and other fuels with 23.1 percent, Furnishings, household equipment and routine maintenance with 22.2 percent and Health with 20.9 percent. Inflation was lowest in the Communication subgroup (9.0%). Inflation trends in the second half appears quite stable, especially between July and August where there was a marginal increase of 0.2 percentage point in the rate recorded in the latter. Though the subsequent month increased by 0.3 percentage point, the overall trend is stable compared to the first Half of 2016. The month of October recorded the least rate of inflation (15.8%) comparative to previous months however, the desk is of the view that the relative stability in inflation will be cut of in the ensuring months as there is a high probability of a rise immediately before, during and after the December polls. The Christmas Eve which is characterized by imported inflation will also have an indirect impact on the domestic inflation.

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