Report by Monika Kristof
Executive summary
- The annual inflation rate for April 2021 increased to 3.9% from 3.1% recorded for the previous month. See Figure 1.
- On a 12 months period April 2021 recorded the highest annual inflation rate.
- The main drivers of the increase in the annual inflation rate were ,transport, alcoholic beverages and tobacco, furnishings, household equipment and routine maintenance of the house, housing, water ,electricity, gas and other fuels, communications and food and non-alcoholic beverages categories .See figure 2
- The hotels and cafes inflation remain in negative territory .
Analysis
- Transport inflation recorded a huge increase from (-0.1%) to (7.5%), this was mainly influenced by second effects of fuel prices.
- Alcoholic beverages and tobacco recorded an increase in the annual inflation rate from (0.4%) to (4.2%),this was influenced by the high prices of tobacco.
- Furnishings, household equipment and routine maintenance of the house recorded an increase in the annual inflation rate from (2.2%) to (5.3%) ,this was influenced by an increase in the prices of carpets and other floor coverings.
- The communications inflation increased from (1.5%) to (3.1%),this is due to continuous demand for data and voice services.
- Food and non-alcoholic beverages inflation increased from (4.2%) to (5.9%),due the rise in meat prices.
- The annual inflation rate for hotels ,cafes and restaurants declined from (1.7% ) to ( -0.2%),as this sector remain under pressure.(see figure 2).
Outlook
- The sudden surge in the annual inflation rate will alert Central Banks and their subsequent monetary policy decisions.
- The increase in the annual inflation rate is driven primarily by cost-push factors with added pressure on the supply side by the vaccine roll-out.
Figure1: Annual inflation rate
Figure 2: Categorical analysis Year on Year %
