Report by Monika Kristof
Executive summary
- The annual inflation rate for November 2020 declined to 2.2% from 2.5 % that was recorded for November 2019.See figure 1.
- The decline in the annual inflation rate between November 2019 and November 2020 resulted mainly from decreases reflected in the price levels of clothing and footwear, housing, water, electricity, gas and other fuels, transport, education, hotels, cafes, and restaurants categories.
- The categories of food and non-alcoholic beverages, alcoholic beverages and tobacco, furnishings, household equipment and routine maintenance of the house, communications, miscellaneous goods, and services recorded an increase in the annual inflation rate between November 2019 and November 2020.See figure 2.
Analysis
- The decline in the annual inflation rate for clothing and footwear from (1.9% to -6.5 %) was influenced by the decline in the prices of men’s clothing and adult footwear.
- Housing, electricity water, gas and other fuels recorded a decline in the annual inflation rate from (1.9% to -1.3%), this was influenced by the price levels of rental payments for dwelling (both owners and renters), regular maintenance and repair of dwelling and water supply, sewerage service and refuse collection.
- The decline in the annual inflation rate for the transport category from (0.1% to -1.2%) was influenced by the decline in the prices of operation of personal transport equipment and the lack of demand for public transportation services.
- The decline in the annual inflation rate for the education category from (12.0% to 7.0%) was influenced by the decline in the prices of pre-primary education (ages 2 to 6 years), primary (private) and secondary education (ages 7 to 17 years) and tertiary education category.
- The decline in the annual inflation rate for hotels, cafes, and restaurants category from (3.5% to 0.9%), was influenced by the lack of consumer confidence which led to a lower demand for accommodation services.
Outlook
- December is a holiday season and people tend spend more, this will result in an increase in the overall demand for goods and services, consequently this will increase the overall annual inflation rate. We project that the annual Inflation rate for December 2020, will rise but remain around 2 and 2.5 %.
Figure1: Annual inflation rate
Figure 2: Categorical analysis Year on Year Percentage
