May Inflation Rate Projected To Climb Between 14.5 to 15.58%

There are indications that inflation rate of May will surge further with inflation up at 13.7 per cent in April 2016, the highest level since 2010.

According to analysts, the rate is expected to skyrocket following the impact of fuel price increase and hike in food prices.

Although the managing director and chief executive of Financial Derivatives Company Limited, Bismarck Rewane, projects a rise to 14.5 per cent, analysts at FSDH Merchant Bank have predicted that inflation to hit 15.58 per cent in May.

According to the analysts the expected rise in the inflation rate was as a result of increase in the prices of most items in May as a result of higher transport costs following the increase in the pump price of premium motor spirit (PMS).

The analysts said: “We expect the increase in the inflation rate to come from increases in most of the divisions which contribute to the index. Our model indicates that the price movements in the consumer goods and services in May 2016, would increase the Composite Consumer Price Index (CCPI) to 198.31 points, representing a month-on-month increase of 2.75 per cent. We estimate that the increase in the CCPI in May will produce an inflation rate of 15.58 per cent.”