Report by Monika Kristof
Executive summary
- The annual inflation rate for August 2021 increased to 3.4% from 2.4% recorded for August 2020. See figure 1.
- The main drivers of an increase in the annual inflation rate were transport, hotels, cafes and restaurants, housing, water, electricity, gas and other fuels and health categories. See figure 2
- On a monthly basis the inflation rate declined by 0.6%. See figure 1
- The main drivers of the decline in the monthly inflation rate was observed in the transport category due to the decline in the cost of public transport services
Analysis
- Transport category recorded a huge increase in the annual inflation rate from (1.2%) to (6.2%). This was mainly influenced by high costs of operation of personal transport equipment and a slight increase in demand for vehicles
- The annual inflation rate for hotels, cafes, and restaurants increased from (-0.9%) to (2.9%) due to the high demand for accommodation services at the back of the ease of Covid-19 restrictions
- The annual inflation rate for housing, water, electricity, gas and other fuels increased from (-1.5%) to (1.6%) as a consequence of an increase in the costs of regular maintenance and repair of dwelling and an increase in the rental payments for dwelling both owners and renters
- The annual inflation rate for the health category increased from (2.8%) to (3.5%) due to an increase in the demand for outpatient, medical, dental and paramedical services due to covid-19
- The annual inflation rate for the clothing and footwear category increased from (-5.1%) to (-2.7%). This was a result of a high demand for clothing and footwear
Outlook
- We project that the annual inflation rate for September 2021 will remain within the 3 and 4% range. The transport and food categories will remain elevated due to high cost-push factors
Figure1: Annual inflation rate
Figure 2: Categorical analysis Year on Year %
