Wednesday August 12, 2015 / 10.07am /National Bureau of Statistics

 
In July, the Consumer Price Index (CPI) which measures inflation rose by 9.2 percent (year-on-year), unchanged from the rate recorded in June. The Headline index has held at the same rate for the second consecutive month as a result of muted rises in the “Food and Non Alcoholic Beverages”, “Housing Water, Electricity, Gas and Other Fuel”, and “Furnishings & Household Equipment Maintenance” divisions amongst others.

The Food Sub-index rose by 10.0 percent (year-on-year) in July, increasing at the same pace for the second consecutive month. While the rates recorded in June and July are the highs for the year, a slower increase in the Meats, Fish, Fruits and “Potatoes, Yams and Tubers” groups weighted on the Food Sub-index as a whole.

Faster price increases were observed in the “Bread and Cereals”, “Milk, Cheese and Eggs” and “Oils and Fats” groups, while the pace of increase in the price of vegetables held constant over the June and July. The pace of advances recorded by the “All Items less Farm Produce” or Core sub-index increased at a faster pace in July.

The Core Sub-index increased by 8.8 percent (year-on-year), 0.4 percentage points from 8.4 recorded in June with the highest pressures observed in the Transportation, Education and Miscellaneous Good and Services divisions. The pace of increases slowed in multiple divisions such as the Communications, Recreation and Culture and Restaurant and Hotels 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 for the second consecutive month, increasing by 0.7 percent in July, from 0.9 percent recorded in June.

The Headline index increased at a slower rate as all COICOP divisions slowed during the period with the exception being the Health division. The Urban index increased by 9.2 percent (year-on-year), relatively unchanged from rates recorded in June, while the Rural index increased marginally by 9.2 percent, from 9.1 percent in June. On a month-onmonth basis, both the Urban and Rural indices increased by 0.7 percent, lower from 0.9 percent recoded in June.

The percentage change in the average composite CPI for the twelvemonth period ending in July over the average of the CPI for the previous twelve-month period was 8.5 percent, marginally higher from the 8.4 percent rate recorded in June. The corresponding 12-month year-on-year average percentage change for the Urban index remained unchanged at 8.5 percent while the corresponding Rural index edged higher from 8.3 percent in June to 8.4 percent in July.

Food Index
Food prices increased at the same rate in July as in June; at 10.0 percent. While slower increases in the Meats, Fish, Fruits, and “Potatoes, yams and Tubers” groups have weighed on the index, it remains a record high for the year, partly as a result of higher imported food prices and the Ramadan period.

On a month-on-month basis, the Food Sub-index increased at a slower pace of 0.8 percent, 0.3 percentage points from 1.1 percent recorded in June. All groups which contribute to the Food Sub-index increased at a slower rate in July with the exception being the Oils and Fats group.

The average annual rate of change of the Food Sub-index for the twelve-month period ending in July 2015 over the previous twelve month average was 9.6 percent, marginally higher from average annual rate of change of 9.5 percent rate recorded in June.

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 seventh consecutive month. Prices increased by 8.8 percent in July up by 0.4 percentage points from the rate recorded in June.

On a month-on-month basis, the Core Sub-index increased by 0.6 percent, 0.2 percentage points lower from 0.8 percent recorded in June. The largest increases were recorded in the Liquid Fuel (Kerosene), Solid Fuels (Charcoal), “Passenger Transport by Road”, Garments and “Furniture and Furnishings” groups.

The average 12 month annual rate of rise of the index was recorded at 7.2 percent for the twelve-month period ending in July 2015, 0.2 percentage points higher from the 12 month rate recorded in June.

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