The annual rate of inflation has reduced to 7.9 per cent, down from 8.1 per cent recorded in August, triggered by the “base effect” arising from electricity tariffs adjusted last year, according to Central Statistical Office data.
Announcing Zambia’s annual rate of inflation for the month of September, CSO acting director of census and statistics Goodson Sinyenga said the reduced inflation this month was largely attributable to the “base effect” arising from electricity tariffs adjusted in September, 2017.
Base effects occur when variations in the annual growth rate of the Consumer Price Index (CPI) are attributable to an unusual movement in the index 12 months earlier owing, for instance, to significant changes in commodity prices.
It refers to the impact of the rise in the price level in the previous year over the corresponding rise in the price levels in the current year.
“The year-on-year inflation rate as measured by the all items Consumer Price Index (CPI) for September, 2018, decreased to 7.9 per cent from 8.1 per cent recorded in August, 2018. This means that on average, prices of goods and services increased by 7.9 per cent between September, 2017, and September, 2018,” Sinyenga told journalists in Lusaka, Thursday.
“The decrease in the annual rate of inflation is mainly attributed to electricity due to the base effect arising from the adjustment in electricity tariffs in September, 2017.”
According to Sinyenga, food and non-alcoholic beverages accounted for 4.5 percentage points, while non-food items accounted for a total of 3.4 percentage points.
However, the annual food inflation rate spiked to 8.6 per cent this month, the highest on record this year, triggered by sharp price increases in mealie meal, among others.
“The year-on-year (annual) food inflation rate for September, 2018, was recorded at 8.6 per cent compared to 8.3 per cent recorded in August, 2018, indicating an increase of 0.3 percentage points. The increase in the annual food inflation rate is mainly as a result of price changes of breakfast mealie meal, roller meal and maize grain,” said Sinyenga.
This annual rate of inflation of 7.9 per cent recorded this month is the second highest on record this year so far behind last month’s 8.1 per cent.