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Consumer prices ease in Lesotho – Sacu

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MASERU - The Southern African Customs Union (Sacu) has released its monthly inflation for January in which it notes that the inflation rates had increased in Botswana and Namibia, while consumer prices eased in Lesotho, South Africa and Swaziland when compared to the previous month.

The five-member economic group report, of which Lesotho is a member, also notes that the cost of food and non-alcoholic beverages continued to register a double figure inflation in Member States with the exception of Botswana and Lesotho in the month under review. Sacu also notes that the inflationary pressure in food prices can be attributed to the persistent effects of drought on food supply in the region as a whole.    

“In Lesotho, the annual inflation continued with a downward trend since November 2016, recording a rate of 5.0 percent in January 2017 compared to 5.3 percent in the preceding month as reflected in Chart 3. A year earlier inflation rate was 5.8 percent during the corresponding month.

“The deceleration in the annual inflation rate between January 2017 and January 2016 was mainly due to the decline in cost of food and non-alcoholic beverages (8.4 percent down from 10.2 percent in January 2016) that accounts for 36.1 per cent of the overall inflation basket.

“The other main categories based on the basket weights, the clothing & footwear category reflected that prices increased by 3.5 percent in January 2017, while the prices of the third main category, housing and utilities rose by 5.3 percent. On average, prices increased by 0.8 percent between January 2017 and December 2016,” the report says.

Lesotho is one of the countries currently reeling from the effects of the 2015/16 drought that resulted in severe food shortages. The government of Lesotho declared a national food state-of-emergency in December 2015 and subsidies on basic foodstuff as mealie-meal, beans and rice are still being effected to help cushion people out of the effects of drought.

Most of the food items and other commodities in Lesotho are imported from South Africa which, in itself showed a decrease in inflation figures during the month of January. According to Sacu, the annual inflation rate in South Africa for the month of January eased to 6.6 percent in January 2017 from 6.8 percent recorded in December 2016.

“The annual rate in January 2017 was higher than the 6.2 per cent recorded during the similar month in 2016. The main contributors to the annual inflation rate in January 2017 were food & non-alcoholic beverages (1.9 percentage points) and housing & utilities (1.4 percentage points).

“On average, prices increased by 0.6 percent between January 2017 and December 2016. The annual inflation rate continued to be above the target range of 3-6 percent set out by the South African Reserve Bank,” the Sacu report says.

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