Report by Monika Kristof
Executive summary
- The annual inflation rate for February 2021 stood at 2.7% up from 2.5% as recorded in February 2020.see Figure 1.
- February 2021 recorded the same annual inflation rate as January 2021.
- An increase in the annual inflation rate between February 2020 and February 2021 emanated mainly from the categories of Food and non-alcoholic beverages, alcoholic beverages and tobacco, housing ,water electricity gas and other fuels and communications and health category. See figure 2
- The category of clothing and footwear and hotels, cafes and restaurants recorded a deflation for February 2021.
Analysis
- The annual inflation rate for food and non-alcoholic beverages increased from (2.8%) to (5.5%) this was mainly influenced by high demand for meat and oils and fats.
- The annual inflation rate for communications increased from (1.4%) to (3.1%), this was influenced by the high demand for communication services due to the continuing remote working condition.
- Alcoholic beverages and tobacco annual inflation rate increased from (2.7%) to (4.2%),this was influenced by an increase in demand for tobacco.
- The annual inflation rate for housing water, electricity, gas and other fuels increased from (-0.5%) to (1.5 %) and was driven by an increase in the uptake of rental dwellings.
- The annual inflation rate for hotels, cafes, and restaurants declined from (2.7%) to (-0.8%), this was due by the lack of demand for accommodation services.
- Transport category recorded a decline in the annual inflation rate from (4.4%) to (0.2%).
- The education category recorded a decrease in the annual inflation rate from (7.6.%) to (0.8%) on the back of this was influenced by the decrease in the price levels of primary (private) and secondary education (ages 7 to 17 years).
Outlook
- Food and non-alcoholic beverages ,housing ,water electricity, gas and other fuels and communications categories will continue to be the main drivers of inflation in the coming months.
- We anticipate that the annual inflation rate for March 2021 will pick up but it will hover below 3%.
Figure1: Annual inflation rate
Figure 2: Categorical analysis Year on Year %
