According to the Central Administration of Statistics (CAS), the consumer price index (CPI) remained in the red, recording a negative change in CPI year-on-year (y-o-y) for a 3rd consecutive month. The CPI dropped from 100.18 points in February 2014 to 97.20 points by the end of February 2015, registering a 2.97% yearly downtick. Since “water, electricity, gas & other fuels” and “transportation” constitute two of the largest weights in the CPI with a cumulative share of 25%, it’s not surprising that the CPI inflation turned into negative territory on the back of the 60% decline in international oil prices since January 2014. However, the rate of decline in overall prices has slowed down compared to January’s annual decrease of 3.75%, primarily due to the recovery of Brent crude oil.
In terms of the CPI’s components, Food and non-alcoholic beverages (20.6% of CPI) declined by 0.54% y-o-y in February 2015. Moreover, Transportation (13.1% of CPI) and Water, electricity, gas & other fuels (11.9% of CPI), witnessed a yearly drop of 13.91% and 18.05%, respectively. The final 2 sub-indices that waned were Health (7.8% of CPI) and Communication (4.6% of CPI), posting a 4.34% and 23.69% y-o-y decline, respectively. The effect of lower internet and mobile tariffs launched in Mid-May continue to push down communication prices on a y-o-y basis
However, Education sub-index, constituting 5.9% of the CPI, augmented annually by 4.51% in February 2015.Furthermore, clothing and footwear (5.4% of CPI) prices went up by 36.77% y-o-y, as retailers are trying to compensate for rising rent prices in the commercial sector. In addition, actual rent sub-index for households (old and new rent), with a stake of 3.4% in the CPI, increased by an annual 8.99%.
Yearly CPI Components Change in February
