The consumer price index (CPI) which measures inflation rose 16.82 per cent on a year-on-year basis in April, the National Bureau of Statistics (NBS) has announced.
The uptick in inflation was linked to rising energy costs, exchange rate pass-through effects among other factors.
The NBS said the rise in inflation represents 1.3 per cent points lower compared to the rate recorded in April 2021 (18.12) percent.
The NBS explained that the headline inflation rate slowed down in April when compared to the same month in the previous year.
“Increases were recorded in all Classification of Individual Consumption According to Purpose (COICOP) divisions that yielded the Headline index. On a month-on-month basis, the Headline index increased to 1.76 percent in April 2022, this is a 0.02 percent rate higher than the rate recorded in March 2022 (1.74) per cent,” it said.
It said the percentage change in the average composite CPI for the twelve months period ending April 2022 over the average of the CPI for the previous twelve months period is 16.45 percent, showing a 0.1 percent decrease compare to the 16.54 percent recorded in March 2022.
Likewise, the urban inflation rate increased to 17.35 per cent (year-on-year) in April 2022 from 18.68 per cent recorded in April 2021, while the rural inflation rate increased to 16.32 percent in April 2022 from 17.57 percent in April 2021.
In emailed notes to investors, Managing Director, Financial Derivatives Company Limited, Bismarck Rewane, said the inflation uptick was widely expected and remains the third consecutive monthly increase and the highest level in eight months.
He said that while the persistent rise in inflation was widely anticipated, the slope of the curve is much more steeper than most analysts expected.
Rewane said that unlike in the previous month, prices increased across both the food and non- food baskets. This is due to the combined effects of seasonality (planting season & Easter demand), exchange rate pass-through and higher energy costs.
Rewane explained that despite the spike in inflation, most African countries maintained status quo at their last meetings. This is to support the current fragile economic recovery. But time will tell if the current monetary policy stance is sustainable in the face of quickening inflation.
Cordros Securities Limited, added that in line with the lingering impact of higher transport costs and increased food demand-supply imbalance, consumer prices maintained an uptrend for the third consecutive month.
On a balance of factors, Cordros Securities Limited said it expect the headline inflation to settle at 1.65 per cent m/m in April, with the corresponding base from the prior year translating to a 74bps increase in the year-n-year inflation rate to 17.56 per cent.
“According to the NBS, headline inflation increased by 90bps to 16.82 per cent year-on-year in April – its highest print since August 2021 (17.01 per cent year-on-year). Decomposing the breakdown, we highlight price pressures across the food (+117bps to 18.37 per cent year-on-year) and core (+26bps to 14.18 per cent year-on-year) baskets”.
“The headline inflation print is 16bps and 42bps higher than Cordros’ (16.66 per cent year-on-year) and Bloomberg’s median consensus estimates (16.40 per cent year-on-year), respectively. On a month-on-month basis, headline inflation rose by 2bps to 1.76 per cent (March: 1.74 per cent month-on-month) – tracking higher than the 2022 average of 1.65 per cent month-on-month,” it said.
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