. Kalumbi

By JUDITH NAMUTOWE –
ZAMBIA’S inflation rate for this month drastically dropped to 6.9 per cent from last month’s pegging of 7.2 per cent showing a reduction of 0.3 per cent, the Central Statistical Office (CSO) has said.
This is the first time the annual rate of inflation has slowed to levels less than seven per cent in the last one year.
The decrease in the annual inflation rate was due to a reduction in purchases of mainly motor vehicles and airfares.
This meant that on average, consumer prices increased by 6.9 per cent between May 2014 and May 2015.
“These are the ones that have shown significant contribution to the decline in the annual inflation rate. Of course there could be some other contributing factors, but these are the ones that have been noted ,” CSO director John Kalumbi said.
Mr Kalumbi said at a briefing in Lusaka yesterday that of the total 6.9 per cent inflation rate recorded this month, food and non alcoholic beverage products accounted for 3.7 percentage points, while non-food products accounted for 3.2 percentage points.
The annual food inflation rate for May 2015 was recorded at 7.2 per cent compared to 7.1 per cent recorded in April 2015, adding that this indicated an increase of 0.1 per cent points.
The increase was attributed to increases in the prices of vegetables.
The annual non-food inflation rate for May 2015, however decreased to 6.7 per cent from 7.3 per cent recorded in April 2015 mainly due to decreases in prices of motor vehicles and airfares.
In terms of comparison of retail prices between April and May, 2015 showed that the national average price of a 25 kilogramme (KG) bag of breakfast mealie-meal decreased by 0.56 per cent from K69.7 to K69.35.
Mr Kalumbi said the national average prices of a 25 kg bag roller meal also decreased  by 1.76 per cent from K52.89 to K51.96, while the national average price of a 20 litre tin of maize grain decreased by 10.90 per cent fro K33.50 to K29.85.
Contributions at provincial level indicated that Lusaka contributed the highest to the annual rate of inflation at 2.3 percentage points to the overall annual rate of 6.9 per cent recorded in May, 2015.
Copperbelt had the second highest contribution of 1.2 percentage points while North Western and Western provinces  had the lowest contribution of 0.3 percentage points each.
On trade the country recorded a deficit of valued at K717.2 million in April 2015 from a deficit of K310.3 million recorded in March  2015.
Mr Kalumbi said this meant that the country imported more in April 2015 than it exported in nominal terms.
Since January 2015, Zambia had been recording trade deficits with the lowest being recorded in January at K68.6 million and the highest being recorded in April 2015 valued at K717.2 million.