Movements in the country’s inflation (deflation) as measured by the change in the National Consumer Price Index (CPI) has been affected more by the decline in imported inflation than domestic inflation.
Releasing the report on Thursday 18th February 2021, National Statistician Douglas Kimi said towards the month of May 2020, national inflation became dropping in May 2020 onwards, on a 3-months moving average basis, and entered into deflationary territory in October 2020 and remained towards end of 2020.
The movements in the national CPI was mainly driven by the decline in movements of the imported items sub-index that recorded negative inflation (deflation) from May and subsequently towards the end of the year, outweighing changes in domestic inflation.
Among other factors, it is obvious that the global impact of the COVID-19 pandemic on trade and economies, and on energy and commodity prices have also transmitted through our economy especially though the imports of items within the Food and Non-Alcoholic Beverages such as rice, and the goods within the Transport group such as fuel.
The inflation rates on a 3-months moving average basis for imported items were -5.6% and -7.0%, respectively, while other (domestic) items inflation rates were +1.2% and +0.7% for the months of November and December, 2020.