CPI Rises to 16.5% in June, 0.9% Higher Than 15.6% May Rate

Proshare

Monday, July 18, 2016 8:11AM /NBS

All Items Index
In June, the Consumer Price Index (CPI) which measures inflation continued to record relatively strong increases for the fifth consecutive month. The Headline index increased by 16.5% (year-on-year), 0.9% points higher from rates recorded in May (15.6%). While most COICOP divisions Which contribute to the Headline index increased at a faster pace, the increase was however weighed upon by a slower increase in three divisions; Recreation & Culture, Restaurant & Hotels, and Miscellaneous Goods & Services.


Year on year, energy prices, imported items and related products continue to be persistent drivers of the Core sub-index. The Core index increased by 16.2% in June, up by approximately 1.2% points from rates recorded in May (15.1%). During the month, the highest increases were seen in the Electricity, Liquid Fuel (kerosene), Furniture and Furnishings, Passenger Transport by Road, and Fuels and Lubricants for Personal Transport Equipment.


While imported foods continue to increase at a faster pace, the Food sub index on the aggregate increased, albeit at a slower pace in June relative to May. The index increased by 15.3% (year on year) in June up by 0.4% points from rates recorded in May. The index was weighted upon by a slower increase in the Vegetables and “Sugar, jam, honey, chocolate and confectionery” groups.


Month-on-month, the Headline index has moved in a sideways fashion since February, the first month of a pronounced increase in rates this year. Specifically in June, the index increased by 1.7%, lower by roughly 100 basis points from rates recorded in May.

Year on year, both the Urban and Rural indices increased albeit at a faster pace in June. The Urban index rose by roughly 100 basis points from 17.1% in May to 18.1% in June, while the Rural Index increased by 0.7% points from 14.3% in May to 15.1% in June. On a month-on-month, basis both the Urban and Rural indices increased at a slower pace in June. The Urban index increased by 1.8% during the month, 120 basis points lower from 3.0% in May. In addition, the Rural index increased by roughly 1.6% in June, 90 basis points lower from 2.5% in May.

The percentage change in the average composite CPI for the twelve-month period ending in June 2016 over the average of the CPI for the previous twelve-month period was 11.4%, higher from 10.7% recorded in May. The corresponding twelve-month year-on-year average percentage change for the Urban index increased from 11.2% in May to 11.9% in June, while the corresponding Rural index also increased from 10.4% in May to 10.9% in June.

Food Index
While the Food Sub-index increased at a faster pace (increasing from 14.9% in May to 15.3% in June) driven by imported products and other food groups, the rate of increases in some food groups in particular; Vegetables and “Sugar, jam, honey, chocolate and confectionery” groups slowed, weighing on the index.

Over the first half of the year, the Food index averaged 13.0% (year-on-year), up by 3.5% points from 9.5% in the corresponding period in 2015. On a month-on-month basis, the Food sub- index slowed by roughly 1.1% points from 2.6% in May to 1.4% in June. On a month-on-month basis, the highest price increases were recorded in the Fish, Meat, Bread and Cereals, and Fruits groups.

The average annual rate of change of the Food sub-index for the twelve-month period ending in June 2016 over the previous twelve month average was 11.7%, 0.5% points from the average annual rate of change recorded in May (11.2%).

All Items Less Farm Produce
The “All items less Farm Produce” or Core sub-index increased by 16.2% in June (year-on-year), up approximately by 1.2% points from 15.1% recorded in May. The Core sub-index has increased at a faster pace for five consecutive months.

Over the first six months of the year, the Core sub-index increased by 12.8%, up 5.2% points from rates recorded in the corresponding period in 2015. On a month-on-month basis, after a brief uptick in May, the rate of increases in the Core sub-index continued to slow in June.

The index increased by 1.8%, lower by 0.9 points from rates recorded in May. In June, on a month-on-month basis, the highest price increases were recorded Motor cars, Electricity, Solid Fuels, Fuels and Lubricants for Personal Transport Equipment groups amongst others.

The average twelve month annual rate of rise of the index was recorded at 10.9% for the twelve-month period ending in June 2016, roughly 0.7% points higher from the twelve month rate of change recorded in May (10.2%).

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