Executive summary
- The annual inflation rate for May 2021 increased to 3.8% from 2.1 % recorded for May 2020. See Figure 1.
- The main drivers of an increase in the annual inflation rate were transport, food and non-alcoholic beverages, housing, water ,electricity, gas and other fuels, alcoholic beverages and tobacco, furnishings household equipment and routine maintenance of the house, health and miscellaneous good and services. See figure 2
- The category of clothing and footwear recorded a deflation for the 12-month period between May 2020 and May 2021.
Analysis
- Transport category recorded an increase in the annual inflation rate from (-0.1%) to (7.3%), this was mainly influenced by high cost of operation of personal transport equipment and high demand for vehicles
- Food and non-alcoholic beverages annual inflation rate increased from (4.7%) to (6.6%),this was influenced by the rise in food and meat prices.
- The annual inflation rate for housing, water, electricity, gas and other fuels increased from (-0.6%) to (1.3%),this was due to an increase in the costs of regular maintenance and repair of dwelling.
- Alcoholic beverages and tobacco recorded an increase in the annual inflation rate from (2.2%) to (3.5%),this was influenced by the high demand for tobacco and alcoholic beverages
- Furnishings, household equipment and routine maintenance of the house recorded an increase in the annual inflation rate from (3.7%) to (4.5%) ,this was influenced by an increase in the prices of carpets and other floor coverings and household textiles
- The annual inflation rate for the health category increased from (3.0%) to (3.7%),this is due to an increase in demand for health services and medical equipment due to Covid 19
- The annual inflation rate for hotels, cafes, and restaurants declined from (0.8.%) to (0.5%), this was due to a lack of demand for accommodation services.
Outlook
- We anticipate the annual inflation rate for June 2021 to hover below 4% as demand remains subdued due to the divergent recoveries in the respective economies.
Figure 1: Annual inflation rate
Figure 2: Categorical analysis Year on Year %
