How far we have with accelerating inflation. On 28th January 2021, Acting Director of Census and Statistics, Daniel Daka announced that annual inflation for January 2021 now stood at 21.5%. Followers of inflation will recall that in January of 2019, annual inflation stood at 7.9%.
Following its escape from the Central Bank and fiscal side’s desired range of 6-8%, inflation acceleration has been on a fast pace following the advent of COVID-19.
In their January 2019 report, the Central Statistics Office (CSO) identified bottled carbonated soft drinks such as Coca cola, Fanta and Sprite being the real influencers of the 0.1 percentage rise in inflation at that time
Fast forward to January 2021, the CSO now points the finger at food items being the reason for spiraling inflation. “The annual food inflation rate for January, 2021 was recorded at 25.6 percent compared to 20.2 percent recorded in December 2020, an increase of 5.4 percentage points”.
The latest report identifies a plethora of items that make up the basic food basic that have seen a surging in pricing. “This was mainly attributed to increases in prices of food items such as Bread and Cereals (Breakfast, Roller meal, Maize grain); Meats (Fillet, Rump steak, Brisket, Mixed cut, Tbone, Chicken); Fish (Frozen Fish, Buka Buka, Dried Bream, Dried Kapenta); Vegetables (Cabbage, Tomatoes, Dried beans, Fresh Maize ); Fats & Oils (Margarine, Butter, Cooking Oil) and eggs”.
Whilst the worries of the post-Christmas and New year of January 2019 were fueled by over indulgence in fizzy drinks over the holidays, present day society now faces a pricier food basket which curious does not include fizzy drinks.
The signal of the proverbial food basket being the cause of accelerating inflation can be seen in the then acting CSO Director, Mulenga J J Musepa’s January 2020 report. In that report, annual inflation stood at 15.2%. However, what was interesting was what fueled the swelling of inflation to the mid ‘teens’.
“The year on year (Annual) food inflation rate for January 2020 was recorded at 15.4 percent compared to 15.2 percent recorded in December 2019. This development was mainly attributed to price movements of food items such as Bukabuka, Dried bream, Dried Kapenta Mpulungu, Cooking oil and fruits(such as Oranges, Pineapples and Pawpaw).” In essence, like covid, inflation moved from Soweto market in January 2020 to Shoprite & Pick n Pay in January 2021.