INFLATION RISES ON SURGING EQUIPMENT PRICES
MBABANE - The headline inflation rate in the country noticeably increased to 4.7 per cent in the past month.
This is the annual percentage change in the Consumer Price Index (CPI) last month compared with that of the same period last year. This annual rate is 0.6 index points higher than the corresponding annual rate of 4.1 per cent observed in September.
According to information from the Central Statistical Office under the Ministry of Economic Planning and Development, the month-on-month inflation rate is 0.5 per cent. This is the percentage change in the CPI in October this year compared with that of the previous month.
Increasing
The higher headline inflation was due to increasing annual rates of change reflected in October in the price indices for recreation and culture, which increased from 1.6 per cent in September this year to 5.8 per cent, the following month. There was also an increase in recreational items,equipment, gardens, and pets; namely, pets and related products; and books and stationery, such as miscellaneous printed matter, stationery and periodicals contributed to the higher index in this category.
Furnishing, household equipment, and routine household maintenance which increased from 3.0 per cent in September to 5.1 per cent last month were other contributing factor. Tools and equipment for house and garden, such as small tools and miscellaneous accessories; goods and services for routine household maintenance, such as non-durable household goods contributed to the higher index in this category.
“Restaurants and hotels increased from -2.2 per cent in September 2020 to -1.5 per cent in October 2020. Catering services, such as restaurants and cafés mainly contributed to the increased index in this category,” reported the statistical office.
The increasing rates were slightly counteracted by decreasing rates of growth in the price indices for health which decreased from 3.6 per cent in September this year to 2.7 per cent last month. Medical products appliances and equipment, namely, pharmaceutical products contributed to the lower index in this category.
Consequences
Meanwhile, a continuous surge in inflation has dire consequences. As prices rise, a single unit of currency loses value as it buys fewer goods and services. This loss of purchasing power impacts the general cost of living for the common public who ultimately leads to a deceleration in economic growth. The consensus view among economists is that sustained inflation occurs when a nation’s money supply growth outpaces economic growth.
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