Inflation rate to drop to 14.31 percent in February on base effect – FSDH


March 5, 2018 | 1:21 am
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FSDH Research expects the inflation rate (year-on-year) to drop to 14.31 percent in February 2018 from 15.13 percent recorded in the month of January 2018.


The expected decrease in the inflation rate is largely attributable to the base effect of previous year. In addition, the firm noted the decrease in some major food prices as well as the slowdown in the price movement in some categories of non-food items in the Consumer Price Index (CPI) basket.


The National Bureau of Statistics (NBS) is expected to release the inflation rate for the month of February 2018 on 14 March, based on the data release calendar on the website of the NBS.


The February 2018 monthly Food Price Index (FPI) from the Food and Agriculture Organization (FAO) shows that the index averaged 170.8 points, 1.07 percent higher than the revised value for January but 2.68 percent lower than the February 2017 figure.


The increase in the FPI represented increases in all categories of commodities used in the calculation of the index except vegetable oil and sugar.

The FAO Dairy Price Index appreciated by 6.21 percent in February. The prices of products in all the four categories of milk products that constitute the index firmed up. This increase was mainly supported by strong import demand and lower than expected milk output.


The FAO Cereal Price Index increased by 2.55 percent from the previous month. The sustained increase recorded in the cereal price index is as a result of the rise in the prices of wheat, maize and rice. The FAO Meat Index was marginally up by 0.06 percent. The increase in the prices for bovine meat was offset by decreases recorded in the prices of poultry and pig meat.


On the flip side, the FAO Sugar Price Index dropped by 3.45 percent and represents its lowest level in two years. The drop in the index is on the heels of favourable supply conditions in the main sugar producing regions and last year’s removal of output quotas.

The FAO Vegetable Oil Price Index was down by 3.15 percent. The easing global import demand and rising inventories exerted downward pressure on the prices of palm oil and soybeans.




March 5, 2018 | 1:21 am
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