CPI Rises to 9.2% in June ’15 as Irregularity of the Supply of PMS Continues to Impact Food Prices

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Tuesday July 14, 2015 / 10.07am /National Bureau of Statistics

ALL ITEMS INDEX

In June, the Consumer Price Index (CPI) which measures inflation rose by 9.2 percent (year-on-year), 0.2 percentage points from the 9.0 percent rate recorded in May. The faster pace of the Headline index was as a result of bottlenecks observed during the period which resulted in major COICOP Divisions such as Food and Non-Alcoholic Beverages and Transportation increasing at a faster pace during the period.

 

Through the first six months of the year, the Headline index has increased by 8.6 percent, 0.7 percentage points higher from rates recorded during the corresponding period in 2014. Irregularity of the supply of Premium Motor Spirit (PMS) continues to impact food prices. The Food Subindex rose by 10.0 percent (year-onyear) in June, up by 0.2 percentage points from 9.8 percent in May.

 

On a year-on-year basis, All groups which contribute to the Food sub-index increased at a faster pace during the reporting period with the exception being Oils and Fats; and Potatoes, yams and Tubers groups which increased albeit at a slower pace. The pace of advances recorded by the “All Items less Farm Produce” or Core sub-index edged higher in June.

 

The Core Sub-index increased by 8.4 percent (year-on-year), marginally higher from May with the highest pressures observed in the Transportation, Education and Miscellaneous Good and Services divisions. The pace of increases slowed in multiple divisions as well, such as Clothing and Footwear, Housing Water, Electricity. Gas and Other Fuels, as well as other divisions.

 

It should be noted that the Headline Index is made up of the Core Index and Farm Produce items. As Processed Foods are included in both the Core and Food sub-indices, this implies that these sub-indices are not mutually-exclusive.

 

On a month-on-month basis, the pace of the increase in the Headline index eased, increasing by 0.9 percent in June from 1.1 percent recorded in May with largest increases observed in the Food and Non-Alcoholic Beverages, Transportation and Miscellaneous Goods and Services Divisions.

 

 In June, both the Urban and Rural Price Indices increased at a faster pace relative to May. The Urban index increased by 9.2 percent, up marginally from 9.1 percent in May, while the Rural index increased by 9.1 percent, 0.2 percentage points higher than 8.9 percent in May. On a monthon-month basis, both the Urban and Rural indices increased by 0.9 percent from 1.1 percent recoded in May.

 

The percentage change in the average composite CPI for the twelvemonth period ending in June over the average of the CPI for the previous twelve-month period was 8.4 percent, marginally higher from the 8.3 percent rate recorded in May.

 

The corresponding 12-month year-on-year average percentage change for the Urban and Rural indices edged higher from May to 8.5 percent and 8.3 percent respectively.

 

FOOD INDEX
Supply side challenges continue to have an adverse impact on food prices. In addition to limited PMS supply, the late rains and implicitly, late harvest have failed to weigh on food prices.

 

Ironically, vegetables in particular become less available as precipitation begins, which increases the upward pressure on the Food subindex. The Food Sub-index rose by 10.0 percent (year-on-year) in June, up by 0.2 percentage points from 9.8 percent in May.

 

 On a month-on-month basis, the Food Sub-index increased by 1.1 percent, maintaining the high pace of increase recorded in May. The highest price increases were recorded in the, Vegetables, Fish, Bread and Cereals; and Potatoes, Yam & Other Tubers, groups.

 

The average annual rate of change of the Food sub-index for the twelve-month period ending in June 2015 over the previous twelve month average was 9.5 percent. The twelve month rate of change has held at the same pace a year.

 

ALL ITEMS LESS FARM PRODUCE
The pace of increases recorded on the “All items less Farm Produce” or Core sub-index, which excludes the prices of volatile agricultural produce increased at a faster pace for the sixth consecutive month.

 

Prices edged higher by 8.4 percent (year-on-year) in June from 8.3 percent in May, with the strongest increases recorded in the Transportation, Education and Miscellaneous Good and Services groups.

 

On a month-on-month basis, the Core Sub-index increased by 0.8 percent 0.4 percentage points lower from 1.2 percent recorded in May. The largest increases were recorded in the Fuels and lubricants for personal transport equipment (which includes PMS); Liquid Fuel (Kerosene), Solid Fuels (Charcoal), Maintenance and repair of personal transport equipment; and Passenger transport by road groups.

 

The average 12 month annual rate of rise of the index was recorded at 7.0 percent for the twelve-month period ending in June 2015, unchanged from the 12 month rate recorded in May

 

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