HEADLINE INFLATIONS DROP TO 3.6%

MBABANE – The country’s headline inflation rate was recorded at a reduced 3.6 per cent last month.

This is the annual percentage change in the consumer price index (CPI) in September this year compared with that of the same period last year. This annual rate is 0.3 percentage points lower than the corresponding annual rate of 3.9 per cent observed in August this year. The month-on-month inflation rate (the percentage change in the CPI in September compared with that of August) is 0.1 per cent. This is as per information sourced from the Central Statistical Office.

According to the report, the lower headline inflation was due to decreasing annual rates of change reflected in September in the price indices for recreation and culture which decreased from 11.1 in August to 7.4 per cent in September this year.

Decreases

This is due to notable price decreases in pets and related products, resulting to the lower index in this category. Another contributor was transport. The latter decreased from 5.6 in August to 3.6 per cent in September this year. This fall is due to price decreases in lubricants and other services in respect to personal transport equipment, leading to a lower index in this category. The decreasing rates were slightly counteracted by increasing rates of growth in the price indices for restaurants and hotels which increased from -2.7 in August to one per cent in September this year.

There were notable price increases in accommodation services resulting to the higher index in this category. Furnishing, household equipment and routine household maintenance, which increased from 0.2 in August to 1.9 per cent last month also contributed.

Increases

The is due to notable price increases in non-durable household goods, eventually leading to a higher index in this category. Meanwhile, the importance of headline inflation cannot be overstated. Many central banks around the world are mandated to maintain the price level in the economy. The mandate explicitly states the measure of the price level to be used while designing monetary policy. Most central banks use headline inflation or a similar measure as their target variable. The reason being headline inflation is a broad measure that closely represents the basket of goods and services consumed by most households.

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