Headline in lation unchanged again

MBABANE – For a third month in a row, the country’s headline inflation has remained unchanged.

The headline inflation rate in the past month was recorded at 3.9 per cent. This is the annual percentage change in the consumer price index (CPI) in August this year compared with that of the same period last year.

This annual rate corresponds to the same annual rate of 3.9 per cent observed in June and July this year.

The month-on-month inflation rate, which is the percentage change in the CPI in August compared with that of July, is 0.2 per cent.

Inflation

The lower headline inflation was due to decreasing annual rates of change reflected in August in the price indices for furnishing, household equipment, and routine household maintenance which decreased from 1.4 in July to 0.2 per cent last month.

“The decrease is due to notable price decreases in household appliances (mainly major household electric appliances); and glassware, tableware and household utensils, eventually leading to a lower index in this category,” reported the Central Statistical

Office (CSO). Other contributors were miscellaneous goods and services which decreased from 3.9 in July to 2.7 per cent last month. This fall is due to other services and other appliances, articles and other products for personal care, leading to a lower index in this category.

Clothing and footwear which decreased from 6.8 in July to 5.6 per cent in August also contributed to the figures. There were notable price decreases in footwear products, thereby contributing to the lower index in this category.

Growth

The decreasing rates were slightly counteracted by increasing rates of growth in the price indices for recreation and culture, which increased from 9.1 in July to 11.1 per cent in August this year.

“Newspapers, books and stationery (namely magazines) resulted to the higher index in this category,” reads the report.

Meanwhile, the rising inflation is a threat to long-term investors because it erodes the value of future currencies; can stifle economic growth; and can cause a rise in prevailing interest rates.

Both headline and core results are followed closely by investors and are also used by economists and central banking figures to set economic growth forecasts and monetary policy.