The government could not achieve its year end inflation target of 13 per cent for 2002. Year-on-year inflation for December 2002 stood at 15.2 per cent.
Some economists told the ‘Times Business News’ that they were not surprised at the December’s figure. “This was expected, as food prices were rather high during the Christmas season” they said. Financial analysts from Databank have also predicted a further rise in inflation in the first quarter of this year.
“We expect inflation to increase further in the first quarter, owing to the 90.5 per cent increase in fuel prices, from ?10,500 per gallon currently to ?20, 000 per gallon as of 17 January 2003”, they said.
They have also anticipated an increase in prices of utilities by 12 per cent in March, this year. Fuel prices tend to affect all the other components of the Consumer Price Index because of the rippling effects on transport costs on the activities of businesses.
“We, however, expect that there will be a slow down in the growth rate of the food index in the short term following the bumper harvest experienced last year, which has drastically reduced the prices of some food commodities such as plantain and tomatoes,” they said.
With regard to last year, the food component of the Consumer Price Index (CPI) showed a monthly increase of 1.3 per cent, while the non-food showed a monthly change of 1.5 per cent.
Between October and December, the monthly changes in the food index totalled 3.9 per cent per cent compared to a monthly charge of 0.6 per cent between July and September 2002.