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Frontier Inflation Advantage - September 2016

• Headline inflation eased further to 3.9% YOY growth from 4.0%; declining 0.3% over the month
  
  
• Continued decline in F&B category of 0.7% MOM led overall moderation in inflation
  
  

Inflation Review

• Headline inflation eased further in September, recording 3.9% YOY growth from 4.0% growth seen in August. On a MOM basis, it reported a decline of 0.3%. This was largely on the back of falling food prices which saw the Food & Beverage(F&B) category record a 0.7% monthly decline. This was below our estimates as we expected a more marginal decline in this category due to some upward price pressure in the latter half of the month.
• Similar to the pattern seen in recent months, the largest price decline came from the Vegetables category. Rice and fish prices also recorded price declines, while fruits saw price increases.
• Non- Food inflation, on the other hand, recorded an increase of 0.2% over the month, rising to 2.5% YOY growth. The key driver of this increase was a 0.4% MOM rise in the Transport category on effects of the bus fare hike implemented at the start of August. The Household Equipment & Furnishing category also recorded a slight growth of 0.3% over the month. Recreation & Culture, however, surprisingly recorded its first monthly decline since the start of the index, down 1.4% for the month.
• Core inflation picked up 0.2% MOM in September, following a 1.0% decline recorded the previous month. This saw YOY growth rise to 4.2% from 4.1% in August.
  
  

The attached Post Data report contains the breakdown in inflation by sub-category of the CCPI and the NCPI.