Inflation – Better or Stirring Up
As the hike in prices of basic commodities casts persistent prevalence in this creeping economy, the monthly consumer price index continues to soar.
In a release published by Statistics Sierra Leone Tuesday 4th, the Nation monthly CPI 2007=100 increased to 174.39% in July to 176.35% in August 2011.
Consequently, the monthly rate of inflation increased slightly by 1.13%. This reflects a monthly increase less than the previous month.
The annual Inflation rate for August 2011 decreases slightly from 16.82% in July 2011 to 16.40% in August 2011.
This reflects a 0.42% pin decrease over July 2011. The overall price level improved slightly this month compared to the last month.
Similarly, the monthly rates of inflation increase slightly in all the regions. Western Area is 1.31%, Northern Region 0.97%, Southern region1.55% and Eastern Region 1.12%, comprising two centers, Kenema 1.14% and Kono 1.06% during the same period.
In the old CPI series 1992=100, the year-on-year rates of inflation decreased in all the centers. In Freetown, the year-on-year rate of inflation decreased from 20.93% to 19.53%, in Makeni from 21.59% to 19.37% and in Kenema from 21.10% to 19.74% during the same period.
The Nation’s monthly CPI 2007=100 increases from 174.39% in July 2011 to 176.35% in August 2011, resulting in a 1.13% increase in inflation rate this month.
Nevertheless, this reflects a monthly increase that is lower than the previous months. The stable exchange might be the factor behind the slight increase in prices.
With the exception of transport and communication indices, the indices for all other main components increased.
On a composite basis, there were increases in the indices for the following groups; food and non-alcoholic beverages 1.81%, tobacco and narcotics 1.30%, furniture, household equipment and household maintenance 0.35%, recreation and culture 0.37% and restaurants and hotels 1.07% while education remained constant.
The food products which price increased this month include; bread and cereals1.68%, fish and sea food 1.42%, fruits 0.86%, milk, cheese and eggs 0.17%, oil and fats 3.65% and vegetable 1.22%. This price increases may probably due to the month of Ramadan which has contributed to the slight increase in the index for food 1.81%.
The National CPI measures the change in prices, on average, of the goods and services bought by most households in Freetown, Bo, Kenema and Makeni including all expenditure groups and both families and single persons.
Prices are collected for 251 items. All prices collected are the prevailing retail market prices from six (6) markets in the Greater Freetown area, three (3) Markets in Bo Town, three (3) markets in Kenema Town and two (2) markets in Makeni Town for weekly prices and other outlets from monthly items whose prices are less likely to fluctuate rapidly.
The National Index was computed by aggregating the CPI for the four index towns previously published separately with different base periods.
The old CPI series for Bo, Kenema, Makeni and Freetown were rebased to base year 2003, computation methodology changed from the Modified to the Traditional Laspeyres, and transformed into the Classification of Individual Consumption by Purpose (COICOP) with 12 functions.
The separate center CPIs were aggregated at the sub-class level at which level new weights were also introduced to obtain the Interim National Index.
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