Africa-Press – Eswatini. Eswatini’s headline inflation decreased to 4.3 per cent in December from the 4.7 per cent, thanks to decline of food and alcoholic beverages price indices.
According to the latest Consumer Price Index (CPI) report issued by the Central Statistical Office (CSO) the lower headline inflation was due to decreasing annual rates of change, reflected in December in the price indices. The price indices that dropped include food and non-alcoholic beverages, which decreased from 8.4 per cent in November 2023, to 7.1 per cent in December 2023. It was reported that fish and seafood; bread and cereals and sugar, jam, honey, chocolate and confectionery, mainly contributed to the lower index in this category.
The report further indicated that another price index that dropped was for transport, which decreased from 0.0 per cent in November 2023 to -0.5 per cent in December 2023. Airfares: Fuels and lubricants; and spare parts and accessories, mainly contributed to the lower index in this category. Another contributing factor was for furnishing, household equipment and routine household maintenance, which decreased from 4.1 per cent in November 2023 to 3.9 per cent in December 2023. Household textiles; small electric household appliances and small tools and accessories; mainly contributed to the lower index in this category.
Rates
However, the decreasing rates were counteracted by increasing rates of growth in the price indices for clothing and footwear, which increased from 6.0 per cent in November 2023 to 6.5 per cent in December 2023. Shoes and garments contributed to the higher index in this category. Health, increased from 0.7 per cent in November 2023 to 1.2 per cent in December 2023. Pharmaceutical products, mainly contributed to the higher index in this category.
The drop in the country’s headline inflation resonates well with the global expectations, as economists worldwide anticipated a decline in inflation in 2024. According to the Economic Experts Survey, German think-tank, Ifo Institute, economists projected a global average inflation rate for 2024 at five per cent, lower than the previous expectation of six per cent.
Expected inflation rates for 2025 and 2027 follow a downward trend, compared to the previous quarter, but remain high at 4.4 and 3.6 per cent, respectively. “Inflation expectations vary widely among the world’s regions,” as most regions show a decline in short-term and long-term inflation expectations compared to the previous quarter.
Growth
Global economic growth will remain ‘resilient’ this year after a stronger-than-expected 2023, the International Monetary Fund said on Thursday, but work is needed to boost global growth rates above an anemic three per cent range in the medium term. Local economists says the drop in headline inflation was good news, as it was reflecting economic rebound after the shocks experienced in the past years.
One of the economists who spoke to this publication stated that the drop in the inflation rate was something to appreciate and celebrate, as it meant that the economy was starting to stabilise. The economist stated that the drop in inflation was a good sign in addressing issues of food insecurities and poverty. She stated that, now that inflation was declining it meant that even food prices were going to ease and allow more consumers spending which is more required by the economy to grow. She said this would also assist in stimulating the private sector, hence the growth of the economy. She added that the drop in inflation also has positive impact on consumers’ disposable income.
Outlook
The economist added that the fall in inflation would also allow consumers and businesses access more instruments from financial institutions, like banks as the conditions were likely to be eased. She added that the declined in inflation also pointed to a positive outlook to the upcoming budget speech to be delivered by the Minister of Finance Neal Rijkenberg.
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