According to the Central Administration of Statistics (CAS), consumer prices rose by a yearly 5.55% in the first month of 2018, compared to an average inflation rate of 4.25% recorded by Jan. 2017. The rise in prices across all components of the Consumer price index (CPI) may be partly attributed to the bullish trend of oil prices that started in 2017 onwards, and to the implementation of the VAT hike that went into effect as of January 1, 2018.
In details, the prices of “Food and non-alcoholic beverages” (20% of CPI) recorded an annual growth of 3.4% in January 2018. In its turn, the costs of “Housing and utilities” (including: water, electricity, gas and other fuels), which grasped a combined 28.4% of the CPI, climbed by 5.41% year-on-year (y-o-y) in the beginning of 2018. The breakdown of the component reveals that “Owner-occupied” rental costs composing 13.6% of “Housing and utilities” increased by 4.21% y-o-y, and the average prices of “Water, electricity, gas, and other fuels”, making up 11.8% of the same category, rose by an annual 6.71% over the same period.
Moreover, the price of “Transportation” (13.1% of the CPI), gained an annual 4.92% owing it to the continuous recovery in the average international price of oil which reached $69.08/barrel in January 2018, up from $55.45/barrel in the first month of 2017.
In addition, the sub-indices of “Health” (7.7% of the CPI) and “Education” (6.6% of the CPI) respectively recorded upticks of 4.74% and 3.75% y-o-y in January 2018. The increase in “Education” may be due to the teachers’ salaries adjustment in the private sector following the salary scale in the public sector during the last quarter of 2017. Another increase in education costs is expected to take place in April, the date when the third installment is paid.
The prices of “Communication” (4.5% of CPI) and “Clothing and Footwear” (5.2% of CPI), posted respective y-o-y rises of 0.87% and 24.59% over the same period, as the latter may be affected by the appreciation of the Euro vis-à-vis the USD, and the start of sales a bit later than last year.
“Restaurants & hotels” (2.8% of CPI) prices also added 4.44% y-o-y, which may be partially attributed to the new highs recorded in tourist activity by the end of 2017 and its ongoing effects into the first month of the year.
Average Inflation Rates in January
Source: CAS