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Overall inflation for 2021 now projected to average around 3.9% – central bank

Overall inflation for 2021 now projected to average around 3.9% – central bank

The country’s overall inflation is projected to average around 3.9% for 2021, slightly higher than the previous forecast of 3.6%, said the central bank governor, Johannes Gawaxab in a Monetary Policy Announcement on Wednesday.

Gawaxab said annual average inflation increased to 3.5% during the first seven months of 2021, compared to 2.1% for the corresponding period in the previous year.

“The increase in inflation was mainly driven by the food and transport categories. This was on account of supply constraints particularly for meat and a rise in international oil prices, respectively,” he said, adding that overall inflation moderated to 4% in July 2021 from 4.1% in June.

Meanwhile, Gawaxab said the Monetary Policy Committee (MPC) decided to keep the repo rate unchanged at 3.75 percent.

“This decision was taken following a review of global, regional, and domestic economic and financial developments. It was noted that higher inflation is increasingly posing a risk to the sustainability of the current level of the repo rate,” he said, adding that the rate remains appropriate to continue supporting the weak domestic economy.

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