CPI Rises to 9% in May '15 for the 6th Consecutive Month as Food Prices Edge Higher

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Friday June 12, 2015 / 8.27am /National Bureau of Statistics

ALL ITEMS INDEX
In May, the Consumer Price Index (CPI) which measures inflation rose by 9.0percent (year-on-year), 0.3percentage points from the 8.7percent rate recorded in April. The faster pace of the Headline index was as a result of increases in most COICOP Divisions which contribute to the Headline index, with the exception of a slower increase in the Communications Division. The faster pace of increases in the COICOP divisions was also observed in the Food and Core sub-indices.

Food prices edged higher in May as a result of the late onset of rains which have pushed back the harvest season coupled with higher transportation costs due to limited Premium Motor Spirit (PMS) availability. The Food Sub-index rose by 9.8 percent (year-on-year) in May, up by 0.3 percentage points from 9.5 percent in April. All groups which contribute to the Food sub-index increased at a faster pace during the reporting period with the highest year-on-year rises recorded in the Fish, Potatoes, yams and Tubers and Meats groups.

The pace of advances recorded by the “All Items less Farm Produce” or Core sub-index increased for the Fifth consecutive month in May. The Core Sub-index increased by 8.3 percent (year-on-year), 0.6 percentage points from 7.7 percent recorded in April, with the highest pressures observed in the Housing Water, Electricity, Gas and Other Fuels; Alcoholic Beverage, Tobacco and Kola; and Transportation divisions. The pace of increases continued to slow in the Communications division however.

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 Headline index increased by 1.1percent in May; the largest month-on-month increase recorded since June 2012 as a result of increased PMS prices and the resulting knock-on effects on the prices of other consumer items. Prices increased at a faster pace across all COICOP divisions that contribute to the index.

In May, both the Urban and Rural Price Indices increased at a faster pace relative to April. The Urban index increased by 9.1 percent, from 8.7 percent in April, while the Rural index increased by 8.9 percent, 0.3percentage points higher than 8.6percent in April. On a month-on-month basis, both the Urban and Rural indices increased by 1.1percent from 0.8 and 0.7 percent respectively recoded in April.

The percentage change in the average composite CPI for the twelve-month period ending in May over the average of the CPI for the previous twelve-month period was 8.3 percent, marginally higher from rates recorded in April. The corresponding 12-month year-on-year average percentage change for the Urban and Rural indices edged higher from April to 8.4 percent and 8.2 percent respectively.

FOOD INDEX
The pace of increase of food prices as recorded by the Food sub-index increased for the second consecutive month in May. Food prices rose by 9.8 percent (year-on-year) in May, 0.3percentage points from rates recorded in April.

On a month-on-month basis, food prices rose by 1.1 percent in May, the highest month-on-month increase recorded on food prices since September 2012.

On a month-on-month basis, the highest price increases were recorded in the, Fish, Oils and Fats; and Potatoes, Yam & Other Tubers, groups. The average annual rate of change of the Food sub-index for the twelve-month period ending in May 2015 over the previous twelve month average was 9.5 percent. The twelve month rate of change has held at the same pace for eight consecutive months.

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 fifth consecutive month. Prices rose by 8.3 percent (year-on-year) in May, up by 0.6 percentage points from 7.7 percent in April with the strongest increases recorded Housing Water, Electricity, Gas and Other Fuels; Alcoholic Beverage, Tobacco and Kola; and Transportation divisions

On a month-on-month basis, the Core Sub-index increased by 1.2 percent, increasing at the fastest pace observed since August 2013. This was 0.6 percentage points higher from 0.6 percent recorded in April.

The largest increases were recorded in the Liquid Fuels (Kerosene), Repair of Household Appliances and Furniture, Fuels and Lubricants for Personal Transport Equipment (Premium Motor Spirit), and Household Textiles groups amongst others. The average 12 month annual rate of rise of the index was recorded at 7.0 percent for the twelve-month period ending in May 2015, marginally higher from the 12 month rate recorded in April (6.9percent).

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