Zambia’s Year on Year Inflation rate for May 2019 increased to 8.1 Percent for the second time in 10 months. The inflation index last peaked above the targeted upper limit of 8 percent in August 2018.
The country’s inflation figures are currently harvested by the Central Statistical Office which feeds data into entities such as the Ministry of Finance and Bank of Zambia who are the custodians of fiscal and monetary policy respectively. The CSO produces a number of statistical products in the Economic, Social, Agricultural and Environmental areas according to the CSO’s mandate. The information collected in these areas may be used for various purposes including policy formulation, planning, implementation, monitoring and evaluation of programmes and projects.
“The year on year inflation rate as measured by the all items Consumer Price Index (CPI) for May 2019 increased to 8.1 percent from 7.7 percent recorded in April 2019”, read the statement from Daniel Daka the current acting Director of Census & Statistics issued on 30th May 2019 on the CSO website. “This means that on average, prices of goods and services increased by 8.1 percent between May 2018 and May 2019.”
Inflation is one of the key variables tracked by the Central Bank when it makes its Monetary Policy decision. “Over the next eight quarters, inflation is projected to rise above the upper bound of the 6-8% target range as some of the risks to inflation outlined in the previous MPC statements have begun to materialise”, read the statement from Dr Denny Kalyalya following his Q2 MPC address to the media in May 2019 at the Central Bank. He further cautioned “If not addressed, inflation is expected to remain above the target range over the reference period”.
Year on Year Food and Non Food Inflation rate are inputs into calculating the weighted average inflation figure the likes of the Central Bank and firms that calculate the purchasing managers index (PMI) track. CSO indicates that from March 2019, Food inflation has hovered above 8 per cent and is currently (May 2019) at 9.1 pushing up the weighted average to above the upper bound target.
The CSO monitored 6 areas that influenced the increase. These included Food and Non-alcoholic beverages, Clothing and Footwear, Housing, Water, Electricity, Gas and other fuels, Furnishing, household equipment and household maintenance, recreation and culture and Miscellaneous goods and services.
The largest increase was in Food and Non-alcoholic beverages. “The inflation rate for Food and Non-alcoholic beverages CPI main group increased to 9.1 percent in May 2019 from 8.3 percent in April 2019”, read the May 2019 CSO report. “The increase is mainly attributed to price changes in products such as Vegetables (tomatoes, onions, spinach, sweet potato leaves, green pepper and Lumanda); Meat (Rump steak, Brisket, T-bone and Live Chicken); Fish products (dried Kapenta; Mpulungu, Siavonga and Chisense).”