We can clearly see the impact of the three major rounds of direct assistance to households in 2020 and 2021, as well as the sharp drop in consumption during the early stages of the pandemic. For example, see How Have Households Used Their Stimulus Payments and How Would They Spend the Next? from the New York Fed. South Africa: Inflation drops to lowest level since June in September. The inflation rate for consumer prices in Ghana moved over the past 56 years between -8.4% and 122.9%. The monthly increase was 0,6%, slightly higher than the 0,5% rise recorded between October and November. The rising inflation in Africa points towards harsh economic times. _taboola.push({ KamPay lottery project strives to create a pan-African lottery that offers significant prizes and encourages high participation. Markets expect that the Federal Reserve will continue raising rates to drive down inflation. Read more about the author and his research. Southern Africa "High food and energy prices have led to high inflation for several countries, mostly those with flexible exchange rate regimes. Inflation figures 2021. We expect even lower inflation, of 3.7% based on softer economic growth than the SARB is projecting for 2021 (at 2% versus 3.8%), which makes its record-low policy rate of 3.5% sustainable. Inflation is rising around the world. mode: 'thumbnails-rr', Uganda Governments must prioritise tackling the rising nflation in Africa [Photo/saheliantimes]. By the end of 2021, the already fragile Sudanese economy suffered again when. (View Release Schedule for details on upcoming releases) Another way in which federal assistance has manifested itself is in the expansion of monetary aggregates. While these statistics are disheartening at a glance, they also show potential for growth. VAT was not the only tax affected. BoG cuts policy rate to 13.5% 1 year ago. Investors are looking at digital banking solutions to intervene and offer a solution to high inflation rates in Africa. %. Central bank independence (CBI) is one example of this progressive economy. This increased demand has met with production capacity constraints, which explains why certain goods are hard to find, suffer from extended delivery times or register sharp price increases. The coronavirus (COVID-19) pandemic continues to cause supply disruptions in economies worldwide. The average annual inflation rate between these periods has been 9.66%. This page displays a table with actual values, consensus figures, forecasts, statistics and historical data charts for - Inflation Rate. For example, all of Benins wheat comes from Russia, while practically all Somalias wheat imports come from Russia and Ukraine. This means that 100 rand in 2021 are equivalent to 109.66 rand in 2022. More news For example, the rate of inflation in 2021 was 7.0%. Annual consumer inflation dipped to 7,6% in August from 7,8% in July. On a month-on-month basis, fuel prices dropped by 0,2% between May 2021 and June 2021. Concurrent with these developments, the federal government provided several rounds of economic assistance to individuals and businesses. If you use our chart images on your site or blog, we ask that you provide attribution via a link back to this page. Views expressed are not necessarily those of the St. Louis Fed or Federal Reserve System. Developed countries typically benefit from high levels of financial development and institutional quality. For example, see . An important concern is where inflation will be headed over the medium and long run. In fact, all three inflation rates have remained above 2% annually since March 2021. They point to an upsurge in inflation, with food, fuel and accommodation prices all responding to the rising parallel exchange rate of foreign currency against the Zimbabwean dollar. The inflation rate in 1958 was 3.46%. "Over the course of 2021, only four countries experienced a double-digit annual price increase: Nigeria, Angola, Zambia and Ethiopia," says David Cowan, Citi's chief Africa economist. Inflation rate inches up to 7.8% for June 2021 1 year ago. The Laspeyres formula is generally used. This situation is known as fiscal dominance. Alternatively, the fiscal authority may curb its expansionist impulses if it believes the central bank will do whatever it takes to keep inflation within its target.Specifically, the central bank threatens to create a recession, via higher interest rates, until the fiscal authority relents. Sudans projected inflation rate is an astronomical 197.1 per cent. As a result, yearly inflation soared from 2.4 per cent in January to 5.7 per cent by April. Even though their inactivity on rising inflation has eroded their credibility, some central banks, like Kenyas, have been upfront about prioritizing economic growth. Though we may disagree on their relative contribution, we should not dismiss either. South Africa: PMI improves but remains in contractionary territory in October. Advertise This involves inflation based on the CPI (consumer price index) and the HICP (harmonised consumer price index) . The KamPay wallet is accessible to smartphone users on the single condition of network coverage. Sub-Saharan Africa's rebound surprised the unexpected in the second quarter of 2021, causing a significant upward adjustment in the earlier year's expected growth, from 3.7 to 4.5 per cent. There are three main, fundamental causes of inflation. 14% higher than June 2021 and 33% above June 2020 levels. Fuel prices decreased by 3,8% between July and August, with petrol falling by 5,0% and diesel by 0,9%. Finally, health care inflation has accelerated relative to the pre-pandemic period, though the increase has been moderate so far. Recent studies have demonstrated an interesting find. Specifically, the central bank threatens to create a recession, via higher interest rates, until the fiscal authority relents. Last year's rise was 6,4%. A rand today only buys 0.925% of what it could buy back then. Industry & Trade The token offers diverse functionality. A new mobile payments cryptocurrency to unite one billion people across Africa in the first pan-African digital gaming platform. Though initially deemed a short-lived phenomenon and largely the product of a relatively narrow group of goods and services, high inflation has proved persistent and generalized.See my previous On the Economy blog posts, What Are the Risks for Future Inflation? and How Widespread Are Price Increases in the U.S? As such, it has become a growing concern for policymakers, analysts and the public. The inflated rate is largely due to civil unrest, armed conflicts and extreme poverty. 3 Recall that the former two categories are excluded when computing core PCE. The disruption has increased freight prices, and created logistical challenges, tensions taking longer to address and costing African nations primarily importers-dearly. Blockchain offers a positive disruption to unstable African economies, bypassing inflation and weakened currency. Figure 1: South African Food Inflation and Consumer Price Index (CPI) For a full description of the methodology, see , Households appear to have used a significant fraction of the initial round of assistance to reduce debts. Since the Great Recession . 9 Roughly speaking, M2 includes currency in circulation outside banks, demand deposits, small time deposits and most balances in retail money market funds. SOURCES: Bureau of Economic Analysis and authors calculations. Political instability and economic concerns continue to put several African countries at risk of inflation. Note that, as opposed to the previous figure, the data here are nominal and so include the effects of inflation. Consumer prices increased 0.99% in March over the previous month, picking up from February's 0.60% rise. The table below shows inflation rates for each of these categories for the various periods considered. South Africa: Inflation rises in March. In September 2022, the monthly inflation rate was 0.09. Africa inflation rate for was 0.00%, a 0% increase from . Its expected to reach 18.2 per cent in 2021. Inflationary pressures in the country have been driven by a long-running economic crisis and political instability. The monthly increase in the consumer price index (CPI) was 0,2%, the lowest reading since January 2022 when it was also 0,2%. Most recent CPI South Africa (inflation figure) 7.801 % When we talk about the rate of inflation in South Africa, this often refers to the rate of inflation based on the consumer price index, or CPI for short. As mentioned earlier, the acceleration in the inflation rate for services is not as dramatic, but it has surpassed 3% annually each month since April 2021 and 4% annually since November 2021. The first observation is that this food inflation shock has not hit all African countries in the same way. This is the latest Consumer Price Index and Inflation Rate data for the United States. There are several functions and features of KAMPAY that extend further than simple exchange. Inflation declines to 7.5% in May 2021 1 year ago. South Africa's annual inflation rate eased for the second month to 7.5% in September of 2022, from 7.6% in August, matching market expectations but still above the upper limit of the South African Reserve Bank's target range of 3%-6%. It's expected to reach 18.2 per cent in 2021. Regionwide, average inflation is expected to edge up in 2021 before easing next year depending on commodity prices and . Because Russia and Ukraine are essential exporters of wheat to Africa, prices are expected to climb further amid the conflict in Central and Eastern Europe. 269. As case studies, here are the five countries with the highest percentage predicted in the report. Investing As a reference, the deficit was almost $1 trillion, or 4.7% of GDP in 2019.See the Congressional Budget Offices Monthly Budget Review: Summary for Fiscal Year 2021 for the exact figures. Topping the African list is Sudan with a rate of 245.1%, followed by Zimbabwe (86.7 % ), Ethiopia (34.5% ), Angola (23.9 % ), Sierra Leone (17.3.9 % ), Ghana (16.3 % ) Nigeria (16.1 % ), South Sudan (16 % ), and Zambia (15.7%). Although inflation rates African countries also hold some of the largest growth potentials. The end goal is to develop a lottery that presents big prizes and frequent draws. The South African Reserve Bank (SARB, the central bank) expects inflation to stay well within its 3-6% target-range, at 4.3% for the year. Weekely Newsletter. We have provided a few examples below that you can copy and paste to your site: Your data export is now complete. That issue was followed by abortion (18%), as well as jobs and the economy (11%). Help Center, E-paper Premium Stories Inflation was much higher in 2021 than over the entire pandemic period, as it stayed low throughout 2020 and then accelerated during 2021. Education fees increased by 4,1% in 2021. I am a writer based in Kenya with vast knowledge in Business, Economics, Blockchain, Law and Environmental Conservation. 0. Furthermore, the shock exacerbates some of the regions most important policy concerns, including the COVID-19 pandemics economic and social impacts, climate change, increased security threats, and the United States continued tightening of monetary policy. Please check your download folder. Since the beginning of 2020, inflation in Lebanon has increased significantly. In turn, assisting the African economy and curbing inflation in one way or another. Your information will never be shared or sold to a 3rd party. The combination of increased mobile phone coverage, poor banking facilities and a vested interest in lotteries has created a fertile ground for the intervention of blockchain. In its March 2022 meeting, the Federal Open Market Committee (FOMC) raised the target federal funds rate for the first time in two years. This page shows the inflation figures for 2021 for a large number of countries so that you can easily compare them with one another. Inflation in the United States peaked at 13.5% in 1980. Please check your download folder. Roughly speaking, M2 includes currency in circulation outside banks, demand deposits, small time deposits and most balances in retail money market funds. After the disruptions of 2020, the prices of all major expenditure components began rising faster than in the pre-pandemic period. Blockchain can help to fill in the gaps and contribute to development in the following ways. GSE records best performance in two years to top Africa 2 years ago. In sub-Saharan Africa, one item is driving the trend more than others: food prices. Opinion, Kenya The projected inflation rate is 40 per cent as the government has racked up enormous debt to subsidise the cost of oil production. While African economies are recovering, it is unlikely they will get exempted. On October 26, CBN Governor, Godwin Emefiele said the apex bank will issue redesigned N200, N500, and N1,000 notes, effective December 15, 2022, while the new and existing currencies will remain legal tender and circulate together until January. In comparison, the rate was 6.9% in November of this year. By the end of 2021, 12-month inflation rates for final demand and its major componentsfinal demand goods, final demand services, and final demand constructionhad reached or come close to record highs. Calculating Annual Inflation Rates The spike follows a worldwide pattern as consumer prices soar worldwide, hurting mature, rising, and developing nations. The figure above tells a story about aggregate behavior. Inflation came in at 7.6% in August, which was down from July's 7.8%. For example, M2 grew 5.6% annually between 2016 and 2019. The table has current values for Inflation Rate, previous releases, historical highs and record lows, release frequency, reported unit and currency plus links to historical data charts. The February 2021 CPI and Inflation Report as released by the National Bureau of Statistics (NBS) revealed that the rise in the food index was caused by . Contents Overview Inflation by City / Country Kenya had an agreement with the International Monetary Fund (IMF) for a US$2.3 billion financing package. In contrast, real expenditure in services declined sharply and has only recently recovered to pre-pandemic levels. Today, he is CEO of KamPay, a blockchain project looking to build an ecosystem of mobile gaming and payments for 1 billion people across Africa. The difference in CPI between the years is used by the Bureau of Labor Statistics to officially determine inflation. The inflationary trend across SSA is a mixed bag. Backlinks from other websites and blogs are the lifeblood of our site and are our primary source of new traffic. The minister of Finance and Economic Affairs (MOFEA) has acknowledged that The Gambia is grappling with a conundrum, saying government has spent about D1.5 billion on fuel subsidies since January 2022. The spike is certainly not the first to affect Africa, but it occurs in the challenging environment of post-pandemic recovery, and experts predict it to extend far into 2022. That is, even if we removed those prices that changed the most, inflation would still be elevated, though perhaps not as dramatically. As house prices have increased significantly since the pandemic started, we may expect this component of PCE inflation to increase further over the coming months. SOURCES: Bureau of Economic Analysis, Bureau of Labor Statistics and authors calculations. Education inflation recorded its lowest annual rate in three decades, according to data from Stats SA's latest Consumer Price Index (CPI) release. For the current inflation in South Africa (CPI), click here. 2021 The Exchange - Powered by MediapixManaged by Supported by Digihandler. Reducing borrowing while safeguarding private investment will have an increasingly significant role in regulating inflation in the future. Regional Markets However, they still have one of the highest inflation rates in the world. Education Rates Learn more about the Econ Lowdown Teacher Portal and watch a tutorial on how to use our online learning resources. The inflation rate for consumer prices in South Africa moved over the past 61 years between -0.7% and 18.7%. The following table summarizes what has happened to inflation, according to various measures and different periods. One noteworthy point is that present inflation is likely to continue. Meat prices in South Africa have been driving food inflation in 2022, with a mix of local and international factors playing a role. See the BEAs National Income and Product Accounts tables 2.4.4U, 2.4.5U and 2.4.6U. 4 For a recent outlook on housing services inflation, see YiLi Chien and Julie Bennetts March 28 OTE blog post, Breaking Down the Contributors to High Inflation.". The global inflation rate surged from 4.35% in 2021, and 3.18% in 2020. According to World Bank projections, inflation in Sub-Saharan Africa is anticipated to reach 12.2 per cent by 2022. 6 For a full description of the methodology, see How Widespread Are Price Increases in the U.S.?. High inflation currently poses a risk to this credibility. As a result, Zimbabwes projected inflation rate is 99.3 per cent. Historical data shows that this is the lowest . Answers on everything from accountability to the Feds role, Regular review of community and economic development issues, Podcast about advancing a more inclusive and equitable economy, Interesting graphs using data from our free economic database, Conversations with experts on their research and topics in the news, Podcast featuring economists and others making their marks in the field, Economic history from our digital library, Scholarly research on monetary policy, macroeconomics, and more. As with average prices, all categories show an acceleration in 2021 that has persisted into early 2022. They are published by the BLS but are rarely discussed in news media, taking a back seat to a calendar year's actual rate of inflation. Month Inflation Index Inflation Percentage; 2022, September: 106.1: 7.50 % : 2022, August: 106.0: 7.61 % : 2022, July (15.7%). During the observation period from 1965 to 2021, the average inflation rate was 27.5% per year. South Africa: Inflation softens in August. The figure below shows real PCE by its major components and clearly demonstrates the shift in consumption patterns during the pandemic. UK inflation rate 1960-2021. A figure influenced by an increased cost of production. Depending on ones view, this involves managing long-run inflation expectations or avoiding situations in which the fiscal authority challenges the central banks willingness to defend the inflation target. Sub-Saharan Africas rebound surprised the unexpected in the second quarter of 2021, causing a significant upward adjustment in the earlier years expected growth, from 3.7 to 4.5 per cent. Ethiopia, My Account Given the disruptions caused by the Russia-Ukraine war, we can expect both these components to contribute significantly to aggregate inflation in the coming months. If we further restricted these bounds to -10% to +10%, then inflation would fall to 3.3%. by James Ndwaru. Some countries like Botswana have historically been more adamant than other African governments about maintaining a balanced budget. The inflation rate continues to rise. The price of inland 95-octane petrol edged lower by 10c a litre in the month . Rwanda (R13,40), eventually rising to R17,32 in April 2021, before falling slightly to R17,13 per litre in June 2021. Lotteries are one of the oldest forms of gambling. Contact us For each product category, I computed the annualized price change and the expenditure share in each period. According to the Bureau for . Cryptocurrencies have been identified as a risk management strategy against inflation. It further stated that the American government 'restricted Acceptance of US Dollars below 2021.'. 280. The clear result from the table is that whether the focus is on the entire pandemic period or just 2021, inflation is significantly higher than before the pandemic, regardless of how we measure it. Four of the SSA countries under our review recorded higher inflation while two posted a decline. During the observation period from 1960 to 2021, the average inflation rate was 7.9% per year. Following Eskom's court order success against NERSA in early 2021, it increased electricity prices by an average of 15.63% in April 2021. Inflation rate is calculated by change in the consumer price index (CPI). Nigeria's food inflation rate surged to 21.79% in February 2021, which is the highest rate recorded in Nigeria since October 2005exactly 15 years and 4 months ago. Regardless of the fact that 2021 projections are no longer published by the IMF, local actual data at 31 March 2021 published by the Central Administration of Statistics showed that three-year cumulative inflation is expected to significantly exceed 100% at 31 December 2021. When receiving temporary supplements to their income, poorer households tend to consume most or all of it, while richer households tend to save it. South Sudan has had moments of reprieve due to their increase in oil output. Since the pandemic started, the rise in M2 has exceeded the increase in prices by a factor of five. This is why central banks are concerned about long-run inflation expectations: They act as barometers of their credibility. Angola is the only economy facing high cost-push inflation with an expected policy rate rise (of 50 basis points), where inflation has remained persistently high and has little promise of abating without action that might support the currency rate. Also, according to the African Development Bank , counterbalancing forces in Africa kept average headline inflation stable at 10.4% in 2020, core inflation (in food and energy prices) has risen in many countries. PCE Price Index by Major Components SOURCES: Bureau of Economic Analysis and author's calculations. 10 Chart 2 shows that the 12-month increase for final demand goods was 13.4 percent in 2021. long-term devaluation of the naira may lead to lower productivity because of the decline in incentives. 2 See my previous On the Economy blog posts, What Are the Risks for Future Inflation? and How Widespread Are Price Increases in the U.S?. For example, immense national debt and a decline in export earnings. These nations have decreased their policy rates, indicating that they do not anticipate inflation to fall of its own will. The growth in M2 tracks accumulated federal deficits well, which is not surprising given that the increase in this monetary aggregate was in large part due to the assistance provided to households during the pandemic. The S&P Global Purchasing Managers' Index (PMI) rose to 49.5 in October, up from the prior month's 49.2. US inflation rate 1960-2021. . As time went on, however, household debt started growing at a faster pace than it did pre-pandemic. While these statistics are disheartening at a glance, they also show potential for growth. On a longer term basis, the poll showed domestic consumer inflation was expected to slow to an average of 4.4% next year from an estimated 4.5% this year, before braking to 4.3% the following. For a recent outlook on housing services inflation, see YiLi Chien and Julie Bennetts March 28 OTE blog post, . The COVID-19 period starts in March 2020 and ends in February 2022. For example, see How Have Households Used Their Stimulus Payments and How Would They Spend the Next? from the New York Fed. The nations cost of products continues to hike. Sudan: According to Reuters, Sudan's Central Bureau of Statistics reported the country's inflation at 258.40% in February 2022.This makes Sudan the country with the highest inflation rate in Africa. As a result, the regions growth velocity has slowed this year, with economic activity forecast to climb by 3.8%. In the past, Zimbabwe and Zambia have raised interest rates in response to growing inflation. Critically, long-run inflation depends on who controls this growth rate. The customer loyalty index measures a customer's likelihood to repurchase a product or service in the future, as well as price tolerance. A common theme among nations that have cut or not amended their policy rates remains a view by monetary policy committees (MPCs). Fuel records third month of double-digit inflation. Chris Cleverly, a barrister by profession, has made it his mission to help bring development mechanisms to Africa that can empower Africans to seize their own destiny. Relative to the pre-pandemic period, a larger share of consumption expenditure has experienced higher price increases, and this is even more pronounced for 2021. [57] [58] [59] In some North African countries, the inflation surge has encouraged hoarding practices by consumers. . placement: 'Right Rail Thumbnails', Consumer prices rose 0.57% over the previous month in December, picking up from the 0.49% increase seen in November. It is also informative to focus on a select group of product categories. As a result, developed countries have a significantly lower inflation rate. Households appear to have used a significant fraction of the initial round of assistance to reduce debts. Inflation in housing started accelerating towards the end of 2021. This prognosis, which experts have widely shared, comes from an interplay of many internal and external forces that drive inflation. Food price movement and transport costs largely determined the inflation trend. Currently, consumption is slightly above trend. Consumer prices rose 5.3% in the year ended . Previously, I described several channels that could explain the rise in inflation. October 19, 2022 If the first argument proves even partially correct, then we have not yet seen the full effects of pent-up demand and should expect further demand pressures on inflation. There is a low technical barrier to entry, the wallet is safe to use and has the potential for large-scale participation. The portal includes a wealth of financial tools that extend beyond banking. Headline consumer inflation ended 2021 at 5,9% in December, up from 5,5% in November. KamPay kiosks will allow easy lottery purchases at a low cost, without adding a burden to the merchant. Unlike European, American and Asian economies, African countries dont have the challenges of centralized banks to prevent financial innovation. Oct/22. Different theories suggest different mechanisms for long-run inflation and hence possibly arrive at different answers. However, on the aggregate, most of the assistance received from the federal government has not yet been spent. He joined the St. Louis Fed in 2011. OPEC+ oil cuts mixed bag of fortunes for African economies, Becoming Africas Singapore: Rwanda banks on technology to rebuild its economy, New Dawn: Reforms chart fresh economic path for Burundi, Oil&Gas opportunities abound for Africa amid Russia-Ukraine crisis. - October 5, 2021 Ethiopia's inflation rate rose to 34.8 percent in September, up from 30.4 percent in August, Ethiopia's Central Statistical Agency (CSA) disclosed on Tuesday. This may be due to a variety of reasons, but it does raise a concern about inflationary pressures that may not have fully materialized yet. We are creating a world without borders. All thats required is network coverage. This might especially materialize in services, which are still lagging in terms of expenditures, as shown in the fourth figure. Policymakers believe that an acceptable inflation rate should sit at approximately 2 percent (or below). The chart below shows how food inflation is outpacing and contributing to the pick-up in overall consumer price inflation in sub-Saharan Africa, which rose to about 8 percent in October, up from around 5 percent in 2019. . Overall, the price increase was 9,706.38%. The inflation rates of both food and energy have increased significantly. 7 See the Congressional Budget Offices Monthly Budget Review: Summary for Fiscal Year 2021 for the exact figures. There are regions of high inflation notwithstanding the continent-wide pattern of production gaps and surplus capacity. Even though their inactivity on rising inflation has eroded their credibility, some central banks, like Kenyas, have been upfront about prioritizing economic growth. As COVID-19 mitigation policies wane and economic activity returns to normal, the expectation is that services expenditures will experience robust growth. As the economy returns to normal, one could expect savings to decline, which would imply an increase in consumption as those savings are spent. For example, if we only included product categories whose inflation during the COVID-19 period was between -20% and +20% at an annual rate, overall PCE inflation would fall from 4.0% to 3.7%. There are several periods of interest. African countries reliance on Russian and Ukrainian wheat imports varies, but it exceeds 30% in most cases.