}

January 2011 Zambian Inflation Jumps To 9 Percent

The January 2011 Zambian inflation was recorded at 9 percent, increasing from 7.9 percent recorded in December 2010.

The Zambia inflation figures were announced on 27th January 2011 by acting Central Statistical Office director, John Kalumbi.

According to the acting director, the rise in the inflation rate was attributed to increases in the cost of both food and non-food items.

He said annual inflation rates increased for food, beverages, tobacco, household fuel and lighting, furniture and household goods, medical care, transport and communications, and other goods and services.

However, the annual inflation rates reduced for clothing and footwear, recreation and education.

Why the rise in Zambia annual inflation rate?

As reported in THE POST dated 28th January 2011, economic commentator Chibamba Kanyama said the rise in the country’s annual inflation rate which started in the last quarter of last year was expected.

Kanyama attributed the continued surge in inflation to the “unsystematic” injection of huge broad money into the local economy in the last quarter of last year after the government paid K1.3 trillion to farmers who supplied maize to Food Reserve Agency (FRA).

“Inflation is linked to cash flow and that “unsystematic” offload definitely shocked the market” Kanyama said. “So, in anticipation, most traders increased the prices of things like building materials and this certainly impacted on the country’s annual inflation rate.”
Kanyama said input cost related pressures which were not factored into the CPI rose substantially during the period under review, while most companies increased the cost of most products to help accelerate recovery from the effects of the global economic crisis.

“And also, normally, during the beginning of the year, most companies increase the costs of their products in anticipation of the wage demand by workers which impact on the cash flows,” said Kanyama. “This is a psychological-related pressure.”

Composition of annual inflation rate in January 2011

Of the total 9.0 percent annual inflation rate in January 2011, food products accounted for 2.6 percent while non-food products accounted for 6.4 percent.

Annual food inflation

The annual food inflation rate was recorded at 5.2 percent in January 2011, an increase from 4.4 percent in December 2010.

Non-food inflation

Mr. Kalumbi reported that the annual non-food inflation was recorded at 12.8 percent in January 2011. The rate was more by 1.5 percent of the figure of 11.3 percent in December 2010.

Comparison of retail prices

A comparison of retails prices from December 2010 to January 2011 revealed the following:

The national average price of a 25 kg bag of white breakfast mealie meal reduced by 1.1 percent, from K 53,187 to K 52,605 while the average price of white roller mealie meal increased to K 37, 408 from K 37, 386.



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