Zambia reaches single digit inflation rate
The country’s Central Statistical Office (CSO) through its monthly survey on consumer prices announced last week that the annual rate of inflation, as measured by the all items Consumer Price Index (CPI), was recorded at 9.4 percent as of April 2006 compared to 18.6 percent recorded in April 2005. According to the survey the annual rate of inflation declined by 9.2 percentage points, from 18.6 percent in April 2005 to 9.4 percent in April 2006. “This means that prices as measured by the all items Consumer Price Index (CPI) increased by an average of 9.4 percent between April 2005 and April 2006,” it says. The annual inflation rate for April 2006 was 1.3 percentage points lower than the March 2006 rate of 10.7 percent. This decline of 1.3 percentage points is mainly accounted for by the fall in the cost of food products and household energy. Furthermore, of the total 9.4 percent annual inflation in April 2006, increases in food prices accounted for 4.4 percentage points while non-food items in the Consumer Price Index (CPI) accounted for 5.0 percentage points. Annual food inflation was recorded at 8.3 percent, declining by 2.6 percentage points from the March rate of 10.9 percent. Contributing most to the decline in inflation were decreases in the cost of maize grain, meat, dried kapenta, fish, dressed chicken, tubers (sweet and irish potatoes), dried beans, shelled groundnuts, fresh vegetables, eggs and milk products. However, mealie meal prices recorded marginal increases. Annual non-food inflation rate for April stood at 10.6 percent, compared with 10.4 percent in March 2006. Contributing to the rise were increases in the cost of clothing and footwear. A comparison of prices between March and April 2006, shows that the national average price of a 20 litre tin of maize grain declined by 20.0 percent, from K22,433 to K17,950. The average price of 1kg of dried kapenta (Chisense) declined by 17.4 percent, while the average price of 1kg of tomatoes declined by 2.6 percent. However, the average price of a 25 kg bag of roller meal increased by 0.6 percent. According to CSO the Consumer Price Indices cover three categories including the Metropolitan Low Income Group, which covers Low Income households in the urban areas; the Metropolitan High Income Group, which covers High Income households in the urban areas and ?the Non-Metropolitan Group covering households in rural areas. The Metropolitan areas comprise Zambia’s 10 major towns. They include Livingstone, Lusaka urban, Kabwe urban and all the Copperbelt towns. The Metropolitan areas were further classified into Low and High Income households. According to the survey all the small towns and the rural parts form the Non- Metropolitan.