Inflation eases in November but prices continue to rise

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The Central Statistics Office (CSA) reported that the General Food Consumer Price Index (CPI) for November 2012 has shown a decline of 0.5 percent when compared to the preceding month. “The monthly inflation rate measures the price change between the two latest months and it can be affected by seasonal and other short-term occurrence,” the CSA report indicates.
The overall inflation rate decreased to 24 percent in November from 26.6 percent in February while the food inflation rate declined from 30.4 percent in October to 27.5 percent in November, the Agency reported. Non-food items also declined to 20 percent in November from 20.4 percent in October, 2012.    Despite these positive figures, the price of Teff went up from 1,650 birr to 1,950 birr per quintal (100 kg) at the end of November. Prices of wheat, beans and other cereals also increased in the specified period. Wheat went up to 900 birr per quintal from 800 birr while beans are sold close to 1000 birr, registering an increase of 150 birr. Prices are expected to go down as December is the harvest season.
Based on the CSA report, most of the components of the food index showed an increase when compared to last year. “Especially cereals (18 percent), bread and  other  processed food (13 percent), meat (47.5 percent), milk, cheese and eggs (26.5 percent), vegetables and fruits (35.8 percent), potatoes, other tubers and stems (29 percent), other food items (11.5 percent),  milling charge (21 percent) and food taken away from home (25.3 percent). On the other hand, declines were observed in the indices of pulses (5.9 percent), oil fats (4.5 percent), spices (26.1 percent) and coffee and tea leaves (5.4 percent),” the report discloses.
The annual food inflation increased by 27.5 percent as compared to the one observed a year ago. The country’s non-food inflation rate increased by 20 percent in November 2012 as compared to the one observed in November 2011. “The 12 months moving average inflation rate shows the longer term inflationary situation,” the CSA reported earlier this week in its monthly Consumer Price Index.
Unlike this positive report, the government still failed to limit inflation to a single digit for more than two years since the introduction and launch of the five-year economic plan, The Growth and Transformation Plan (GTP) in July 2010. The new Prime Minister Hailemariam Desalegn, in his recent address to the parliament, expressed concern over the rampant inflation. He also promised to reduce inflation to a single digit with strict market control.