CPI Rises to 12.8% in March; 1.4% Higher Than February Rate

Proshare

Tuesday, April 12, 2016 10:25AM /NBS

All Items Index

In March, the Consumer Price Index (CPI) which measures inflation recorded a sharp rise for the second consecutive month. The headline index increased by 12.8% (year-on-year), roughly 1.4% points higher from rates recorded in February (11.4%) reflecting an increase in the prices of goods and services across the nation to a year-on-year high last recorded in July of 2012.

The higher price level was reflected in faster increases across all divisions which contribute to the index with the exception of the Restaurants and Hotels division which increased, albeit at a slower pace for the second consecutive month.

Transportation costs, the planting season, and foreign exchange movements created significant upward pressures on the Food index in March. The Food index increased by 12.7%, up by 1.4% points from rates recorded in February as all major food groups which contribute to the Food sub-index increased at a faster pace.

Similarly, imported items as well as other domestic shocks continued to have ripple effects across many divisions that contribute to the Core. The index increased by 12.2% in March, roughly 1.1% points from rates recorded in February.

While exhibiting a slower increase in the on a month-on-month basis, the Headline Index still recorded a notable increase in March relative to rates recorded in previous years. The index increased by 2.2%, in March, marginally lower from 2.3% recorded in February. Almost half of all divisions that contribute to the index increased, albeit at a slower pace, during the month notably the Housing Water, Electricity, Gas & Other Fuel; Health, Education, and Restaurants & Hotels divsions.

Both the Urban and Rural indices recorded marked increases for the second consecutive month in March. The Urban index rose by 1.2% points from 12.3% (year-on-year) in February to 13.5% in March. In tandem, the Rural Index increased by 1.3% points from 10.7% in February to 12.0% in March. On a month-on-month basis, while the Urban index increased at a slower pace, from 3.0% in February to 2.0% in March, the Rural index increased at a faster pace, from 1.8% in February to 2.1% in March.

The percentage change in the average composite CPI for the twelvemonth period ending in March 2016 over the average of the CPI for the previous twelve-month period was 9.8%, higher from 9.4% recorded in February. The corresponding twelve month year-on-year average percentage change for the Urban index increased from 9.5% in February to 9.9% in March, while the corresponding Rural index also increased from 9.2% in February to 9.6% in March.

Food Index
The Food sub-index continues to record upward pressure from both imported foods as well as cereals. In March, the Food index increased by 12.7% (Year-on-year), 1.4% points higher from rates recorded in February and reaching a year-on-year high last recorded in May 2012.

The highest price increases were recorded in the Fish, Vegetables, and Bread and Cereals groups for the third consecutive month. On a month-on-month basis, the Food sub-index increased by 2.3% in March, 0.9% points higher from rates recorded in February.

All groups which contribute to the Food Sub-index increased at a faster pace during the month. Month-on-month, the highest price increases were recorded in the Fish, Vegetables, Bread and Cereals; and Meats groups.

The average annual rate of change of the Food sub-index for the twelve-month period ending in March 2016 over the previous twelve month average was 10.5%, 0.3% points from the average annual rate of change recorded in February at 10.2%.

All Items Less Farm Produce
The knock-on effect of foreign exchange movements which has in turn affected the prices of imported food and non-food items, the importation of Premium Motor Spirit as well as the adjustment in the electricity tariffs nationwide have resulted in a surge of rates recorded by the “All items less Farm Produce” or Core sub-index.

The index increased by 12.2% during the month, 1.1% points from 11.0% recorded in February. All key divisions which contribute to the index increased at a faster pace with the exception of the Restaurants and Hotels division which increased at a slower pace.

On a month-on-month basis, the Core Sub-index increased at a slower pace in March relative to February increasing by 1.9%, 0.9% points lower than rates recorded in Feburary.

In March, the highest price increases were recorded in the Electricity, Furniture and Furnishings, Passenger Transport by Road, Spare Parts and Liquid Fuels groups. The average twelve month annual rate of rise of the index was recorded at 9.1% for the twelve-month period ending in March 2016, 0.4% points higher from the twelve month rate of change recorded in February (8.7%).

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