Falling food prices cut inflation
The year-on-year inflation rate fell to 10.9 per cent last month from 12.2 per cent the previous month because food prices eased, the National Bureau of Statistics (NBS) has reported.
Food carries a heavy weighting in the basket of goods that is used to calculate inflation.
Year-on-year food prices fell to 11.3 per cent in January from 14.5 per cent the previous month.
Food prices rose by 1.9 per cent in January from a month earlier, contributing to an overall 1.7 per cent rise in the consumer price index (CPI).
“The increase was highly attributed to rises in kerosene and charcoal prices by 4.8 per cent and food prices by 1.9 per cent,” the NBS reported.
Among food items whose prices rose were cereals, sweet potatoes, green bananas, vegetables, fish, beans, cowpeas, sugar, groundnuts and coconuts.
The non-food inflation rate rose to 10 per cent from 8.6 per cent in December. Items in the category whose prices rose were furniture, household equipment and educational materials.
However, economists forecast a sharp drop in the rate sometimes in April when the government adopts the new methodology for calculating inflation.
Under the new calculation the weight of food has been brought down to 44.3 per cent of the CPI basket from 55.9 per cent.
According to experts, the adoption of the new formula has been delayed because the World Bank and the International Monetary Fund are yet to approve it.
Source – The Citizen