Inflation rises steeply, hits 6-year high of 15.6% y/y
​ Inflation rises steeply, hits 6-year high of 15.6% y/y
Inflation in May accelerated for the 10th consecutive month to 15.6% y/y (April: 13.7% y/y), above Vetiva estimate of 15.1% y/y and Consensus of 14.7%, driven by a 15.1% y/y and 14.9% y/y rise in both Core and Food inflation. This brings average inflation in 2016 to 12.6% y/y, significantly higher than the 8.6% y/y recorded in the corresponding period in 2015. Whilst general price levels continue to bear the brunt of rigid exchange policy and tight domestic food supplies, further pressure from pass-through impact of higher energy prices have driven inflation to the highest level recorded in 6 years. On a monthly basis, inflation rose at a faster pace of 2.75% relative to April (1.61% m/m), representing the highest m/m change recorded since January 2012 (following the partial removal of petrol subsidy). In terms of geographical pressures, Urban prices lifted the headline number with a 17.2% y/y jump (highest since rebased), outpacing Rural prices, which also saw a faster pace of increase at 14.35% y/y.
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