Tuesday, 12 December, 2017

Inflation rises by 4.2% in February

Melissa Porter | 05 March, 2017, 00:35

National CPI has remained positive since October, when it recorded its first increase in nine months.

The rise was in contrast with a median market forecast for flat growth, according to Reuters, and followed a 0.2 per cent drop in December. On a month-on-month basis, food inflation increased 0.3pc in February due to an increase of 2.42pc in the prices of perishable products and 7.86pc in non-perishable products.

This was owing to a jump in prices for gasoline and for heating oil, which increased 11.2 percent and 19.7 percent respectively in the reporting period.

Meanwhile, inflation has gone up by 3.9 percent during first eight months (July-February) of the ongoing financial year over a year ago. CPI Core inflation measured by non-food non-energy CPI (Core NFNE) increased by 5.4 percent on (YoY) basis in February 2017 as compared to increase of 5.3 percent in the previous month.

Some think the bank will raise its long-term interest rate target from zero this year, partly to address the downsides of easing measures that have hurt the earnings of commercial banks and starved insurance and pension funds of returns on government debt.

Meanwhile, the Sensitive Price Index edged up 1.2pc and the Wholesale Price Index rose 3.46pc in February.

Many analysts expect core consumer prices to head toward 1 percent later this year. Similarly, prices of utilities (housing, water, electricity, gas and fuel) increased by 4.83 percent in last the month. The second-highest increase of 12.44pc was witnessed in the index of alcoholic beverages and tobacco. Likewise, in non-food items, motor fuel price surged by 3.12 percent, medical tests 1.64 percent, doctor fee increased by 1.6 percent and personal equipments prices up by 1.34 percent.

Energy prices overall continued a downward trajectory, falling 0.8 percent in the recording period, with the rate of decline slowing from 4.4 percent logged in December.