CPI Rises to 15.6% in May, 1.9% Higher Than 13.7% April Rate

Proshare

Tuesday, June 14, 2016 9:01AM /NBS

All Items Index

In May, the Consumer Price Index (CPI) which measures inflation recorded a relatively strong increase for the fourth consecutive month. The Headline index increased by 15.6% (year-on-year), 1.9% points higher from rates recorded in April (13.7%). The increase in rates in May relative to April reflects an overall increase in general price level across the economy as all divisions which contribute to the Headline index increased at a faster pace in May.

Year on year, Electricity rates as well as other energy prices continue to manifest as key drivers of the Core component of the CPI. The Core sub-index increased by 15.1% in May, up by 1.7% points from rates recorded in the previous month. During the month, the highest increases were seen in the Passenger Transport by Road, Liquid Fuel (kerosene), Fuels and Lubricants for Personal Transport Equipment (Premium Motor Spirit) and Vehicle Spare Parts groups.

Imported foods as well as a drawdown of inventories across the country continue to push food prices higher. The Food sub index increased by 14.9% in May, up by 1.7% points from rates recorded in April as all major food groups which contribute to the Food sub-index increased at a faster pace driven by higher food prices in Fish, Bread and Cereals, and Vegetables groups for the second consecutive month. In addition, the Imported Food sub-index increased by 18.6% in May, 2.2% points from rates recorded in April.

Month-on-month, after a brief respite in rates in March and April, the rates recorded by the Headline Index increased at a faster pace in May. The index increased by 2.8%, up by 1.1% points relative to rates recorded in April.

Year on year, both the Urban and Rural indices recorded marked increases for the fourth consecutive month in May. The Urban index rose by roughly 2.1% points from 15.1% to 17.1%, while the Rural Index increased by 1.6% points from 12.8% in April to 14.3% in May. On a month-on-month basis both the Urban and Rural indices increased at a faster pace. The Urban index increased by 0.8% points from 2.2% in April to 3.0% in May. In addition, the Rural index increased by roughly 1.1% points from 1.4% in April to 2.4% in May.

The percentage change in the average composite CPI for the twelve-month period ending in May 2016 over the average of the CPI for the previous twelve-month period was 10.7%, higher from 10.2% recorded in April. The corresponding twelve-month year-on-year average percentage change for the Urban index increased from 10.5% in April to 11.2% in May, while the corresponding Rural index also increased from 9.9% in April to 10.4% in May.

Food Index
Increased prices of both domestic and imported food products continue to drive food prices higher. The index increased by 14.9% (Year-on-year) during the month of May, 1.7% points higher from rates recorded in April. All groups which contribute to the index increased with the highest increase recorded in the Bread and Cereals group which increased from 14.5% in April to 16.6% in May. On a month-on-month basis, the Food sub-index increased by 1.3% points from 1.3% in April to 2.6% in May.

On a month-on-month basis, the highest price increases were recorded in the Bread and Cereals; Vegetables, and “Sugar, Jam, Honey, Chocolate and Confectionery” groups. The average annual rate of change of the Food sub-index for the twelve-month period ending in May 2016 over the previous twelve month average was 11.2%, 0.4% points from the average annual rate of change recorded in April.

All Items Less Farm Produce
The “All items less Farm Produce” or Core sub-index increased by 1.7% points from 13.4% in April to 15.1% in May. All key divisions which contribute to the index increased at a faster pace during the month, reflecting a general increase in price levels across the consumer basket. On a month-on-month basis, after slowing for two consecutive months, the pace of increases recorded by the Core Index picked up in May.

The index increased by 2.7%, 1.0% points from rates recorded in April. In May, on a month-on-month basis, the highest price increases were recorded Electricity, Fuels and Lubricants for Personal Transport Equipment, and

Furniture and furnishings groups amongst others. The average twelve month annual rate of rise of the index was recorded at 10.2% for the twelve-month period ending in May 2016, roughly 0.6% points higher from the twelve month rate of change recorded in April (9.1%).

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