Inflation rate climbs to 7.9 percent
LESOTHO’S annual inflation rate shot to 7.9 percent in April, up from the previous month’s rate of 7.5 percent, according to the latest figures released by the Bureau of Statistics (BOS).
In its belated monthly Consumer Price Index (CPI) report for April 2016, the bureau noted that the spike was driven by among others, food inflation which had the highest increase of 15 percent, followed by personal care with 6.9 percent, goods and services for household maintenance at 5.3 percent, clothing at 5.1 percent and footwear at 4.4 percent.
BOS gathers price information in 12 urban centres and 45 selected rural areas in the country through monthly visits. During the visits, about 1 000 price quotations are collected in 780 outlets for around 200 different commodity items.
“The annual inflation rate in this report is computed by comparing the CPI level of April 2016 to that of April 2015. The annual inflation rate is estimated at 7.9 percent which shows 0.4 percentage points increase from the rate observed in March 2016,” the bureau said.
“The divisions, which showed a significant annual increase in the inflation rate, were: Food and Non-alcoholic Beverages (14.8 percent), Clothing & Footwear with 4.9 percent, Furnishings, Household Equipment and Routine Maintenance of the House with 4.5 percent, Transport with 1.2 percent, Education (4.9 percent) and miscellaneous goods and services (4.7 percent).”
In the services division, the report indicated that non-durable services recorded an annual inflation of 11 percent, semi durable services 4.8 percent while durable services recorded 3.1 percent in April 2016.
The BOS’S report resonates with the Central Bank of Lesotho’s outlook which last month predicted that Lesotho’s inflation rate would continue on an upward trend in 2016.
The apex bank had cited the rising of food prices as a result of the El Nino-induced drought and the depreciation of the rand, to which Lesotho’s maloti currency is pegged, against other major currencies. The drought had adversely affected the food security of South Africa, which is the main source of food imports for Lesotho, while the weak exchange rate made imports more expensive.
Lesotho’s inflation trends usually follow those of neighboring South Africa. However, in comparison, South Africa’s year on year consumer inflation for April 2016 declined to 6.49 percent from 6.55 percent in March 2016.
THE weak maloti exchange rate with major currencies made food imports more expensive.