The annual rate of inflation, as measured by the all items Consumer Price Index (CPI) has declined from 9.9 percent in December 2009 to 9.6 percent in January 2010, representing a 0.3 percentage points decline.
Central Statistical Office Director Efreda Chulu attributed the decline in the annual inflation rate in January 2010 to continued reductions in the prices of food.
Ms. Chulu, however, says the increase in the price of fuel would be reflected in the February 2010 CPI because it was effected outside the institution’s reference period.
She said in a speech read for her by CSO Deputy Director John Kalumbi at a CSO monthly bulletin in Lusaka today, that of the total 9.6 annual inflation in January 2010, food products accounted for 3.6 percentage points, while non food products in the CPI collectively accounted for a total of 6.0 percentage points.
“The annual food inflation rate was recorded at 7.1 percent in January 2010. This is a decline from 0.8 percent in December 2009. The decrease in the cost of fresh vegetables, fresh fruits, oil and fats contributed most to the decline in food inflation. However, increases were recorded in the cost of mealie meal, maize grain and cereal products”, Ms Chulu said.
Ms. Chulu further disclosed that annual non-food inflation rate was recorded at 12.0 percent in January 2010, saying this was an increase from 11.8 percent in December 2009.
She said regarding disaggregate groups, the annual inflation rates declined for clothing and footwear, furniture and household goods, medical care, transport and communications, recreation and education, among other goods and services.
The CSO Director also said the annual inflation rate increased for rent, fuel and lighting.
“A comparison of the retail prices between December 2009 and January 2010 shows that the national average price of 1kg of dried kapenta reduced by 1.6 percent, from K 48,526 to K47, 761. The national average prices of 1kg of pumpkin leaves reduced by 13.6 percent, from K2, 984 to K2, 577”, she revealed.
She however said the national average prices of a 25 kg bag of white roller meal increased by 3.8 percent, from K47, 736 to K49, 554, while the average price of a 20 litre tin of maize grain increased by 1.7 percent, from K25, 806 to K26, 247.
ZANIS
Atase, does this translate into benefits to Zambians? These figures suspect.
Food prices seem to be more stable than the non-foods. There’s need to address the drivers of inflation in non-foods whre 12% is just too high.
Very positive news. However the CSO should now provide us with a timeline and rationale for rebasing the inflation calculation and a recomposition of the goods basket.
mPANGULA mputyu, is that comment out of negativity or ignorance . Reduction in inflation means that prices are rising at a lower rate so ofcourse it is beneficial to zambians.This could mean that bus fare has increased by k300 when in a previous period it increased by k 400. This should looked at in the context that not too long ago inflation was has high as 30 % . So this is certainly a welcome development
Numbers don’t lie. No further comment. The l-) l-) l-) is working.
#4 Positive pa Zed. You are a wise man. Let’s have more of such people on this LT blog.
Here in the UK, inflation has recently shot up due to fuel retail price increases and higher commodity prices on the global market as the global economy recovers. BBC news 19Jan10:
The Consumer Prices Index (CPI), the government’s preferred measurement, rose to 2.9% in December from 1.9% in November, the biggest monthly rise in the annual index since records began and more than the City’s expectations for an increase to 2.6%.
The headline rate of Retail Prices Index (RPI) inflation, which includes mortgage interest payments and which is used to calculate rises in welfare payments and in wage negotiations, rose to 2.4% from 0.3%. Only a few months ago the RPI was in negative territory.
#1 Mpangula. This from Wilkipedia may help you:
In economics, inflation is a rise in the general level of prices of goods and services in an economy over a period of time.[1] When the price level rises, each unit of currency buys fewer goods and services; consequently, inflation is also an erosion in the purchasing power of money – a loss of real value in the internal medium of exchange and unit of account in the economy.[2][3] A chief measure of price inflation is the inflation rate, the annualized percentage change in a general price index (normally the Consumer Price Index) over time.[4]
# 7 contd
Inflation can have positive and negative effects on an economy. Negative effects of inflation include a decrease in the real value of money and other monetary items over time; uncertainty about future inflation may discourage investment and saving, and high inflation may lead to shortages of goods if consumers begin hoarding out of concern that prices will increase in the future. Positive effects include a mitigation of economic recessions,[5] and debt relief by reducing the real level of debt.
The task of keeping the rate of inflation low and stable is usually given to monetary authorities. Generally, these monetary authorities are the central banks …
Hoped this helped you #1
If people want to know about the negative consequences of high inflation ,all they have to do is look at what happened south ot the Zambezi river in Zimbabwe period.
UK-Zed observer question, is Zambia’s rate of inflation measured from the 1 million people in formal employment plus the GDP? Or does our minister of finance plus our BOZ governor just throw out numbers like random trivia? How is the UK and your family by the way? Mine is good enjoying the fact that the Zambia national team didnot cause any unnecessary heart aches to people back home.
UK – Zed Observer, please help me understand whether this reduction has nothing to do with the reduced money supply in the economy. I say this because most of the government ministries have not received their funding since November last year. This January is coming to an end without any funds from the treasury. Incidentally, during this same period, our Forex reserves grew to an unprecedented US $ 1.8bn. I have therefore concluded that vital govt programmes have been put on halt just to sustain the much desired single digit inflation because there is no real growth in the economy.
help me understand the price reductions:d/:d/
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