The non-food category which includes items such as housing, water and electricity among others make up the biggest weight in the basket at 85 percent. (Seychelles News Agency)
(Seychelles News Agency) – As of June 2023, the annual year-on-year inflation rate of Seychelles has gone down to -1.3 percent, compared to 2.05 percent in the same month of 2022.
The figure, which was published by the National Bureau of Statistics (NBS) as part of the Consumer Price Index (CPI) recently, shows that the core inflation index fell by -0.44 percent over the same period from June 2022 to June 2023.
“The CPI measures the change in the price of goods and services that households pay for the purpose of consumption,” senior statistician at the NBS, Kirsten Arnephy told SNA.
Arnephy said that to track the change in price over time, a basket of goods and services is used and classified into three main groups – fish, other food and non-food items.
“Each category has a specific weight, which is derived from the results of the Household Budget Survey (HBS) and it is determined by how much people are spending towards each commodity or service to the total expenditure incurred by households on commodities,” added Arnephy.
Non-food items make up the biggest weight in the basket at 85 percent, with other food at 14 percent and fish at 1 percent.
The non-food category includes items such as housing, water and electricity, transportation, communications, alcoholic beverages and household equipment. As of June 2023, the inflation rate for this category was 1.5 percent compared to 6 percent in 2022.
The biggest drop in inflation came from transportation costs, which dropped from 11.1 percent in June 2022 to 0.6 percent last year.
“Since the non-food group makes up the most weight in the basket when the price of commodities in that group increases or decreases, it will have an impact on inflation accordingly,” explained Arnephy.
In the other food group, the inflation rate in June 2022 was 6.1 percent, while in June 2023 that stood at 1.1 percent. Here the biggest drop in price was seen in milk, cheese and eggs, from 7.9 percent in 2022 to 0.1 percent in June 2023.
Arnephy also added that the NBS has undergone a re-basing exercise in 2021, where they had to revise the basket to make it more representative of the realities of today.
“We have seen different items added to the basket, such as more hybrid cars, package holidays, as well as non-dairy items like almond and soy milk,” she added.
The drop in inflation or deflation as it is called, is positive for the country, although it is still way off the lowest rate of -5.54 percent, recorded in March 2010.
Seychelles highest inflation rate was recorded in December 2008 at 63.25 percent at the height of the global financial crisis. This was a month after the island nation embarked on a macroeconomic reform programme with the help of the International Monetary Fund (IMF) to primarily address the serious balance of payments and external debt difficulties.