Fuel, food push inflation up

MASERU — Lesotho’s monthly inflation rate increased slightly to 3.7 percent in April, up from 3.6 percent recorded in March, according to the latest figures released by the Bureau of Statistics this week.

The bureau said the major contributors for the increase were liquid fuels which rose by 2.2 percent while fuel recorded an increase of 1.8 percent from the price recorded the previous month.

The prices of vegetables, beer and sugar had also increased slightly by between 1.5 and 1.6 percent during the same period, the bureau said.

“Large monthly increases are observed in the price indices of the following items: carrots, tomatoes, cabbages, dried beans, sugar, custard, beer, paraffin, petrol as well as diesel,” the bureau said.

The bureau said a decrease in prices was recorded in the price indices of maize-meal and bread flour.

The report said the food and beverages category for April this year is 3.2 percent higher than the same month last year.

Household utilities (gas, electricity, rent and other fuels) increased by 2.6 percent in April when compared to April last year.

According to the report the main contributors to the annual increases in the last 12 months have been due to the increase in the cost of transport with eight percent, transport services recorded seven percent, personal care 6.6 percent, education 6.3 percent, clothing 4.5 percent while footwear recorded an increase of 3.3 percent.

The food inflation for April was 3.1 percent.

An analyst at African Alliance, Thabang Mohloki, said the lower inflation rate was against market expectations where predictions had forecast a higher inflation rate.

“This indicates that consumer demand has been subdued. Global food prices have generally declined which should be good news to consumers,” Mohloki said.

Mohloki said he expects inflation to continue to be in the low ranges in the coming months, reaching the lowest point of around 3.5 percent sometime this year.

“Generally when the rate of inflation is low, borrowers become better off. However lenders are worse off given the lower returns,” he said.

The basket of goods that one can purchase will increase as prices will remain low.

Lesotho’s inflation rate has hovered between 4.3 and 3.7 percent since January this year. The inflation rate has been on a downward trend since October 2009 when it was recorded at 4.7 percent.

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