|In the first month of fiscal year 2016-2017, annual inflation, measured by the change in the Consumer Price Index, was 13.3% after reaching 12.5% at the end of the fiscal year 2015-2016. In October 2016, monthly inflation increased by 1.8% http://www.haitilibre.com/en/news-19385-haiti-economy-inflation-continues-to-rise-at-double-digits.html against + 1.3% the previous month.|
The increase in inflation in monthly variation is mainly attributable to the decrease in the supply of food products, the increase in food prices on the international market and the continued depreciation of the gourde in October 2016.
Following of passage of Hurricane Matthew, more than 90% of food crops and fruit trees in the South, Southeast and Grande Anse were devastated. This had the immediate consequence of reducing the available food supply. Indeed, in October, the item “Food, drink and tobacco” rose by 2.1%, up 1.4 percentage points from the previous month. Note that the contribution of this item to monthly inflation, which had reached 27.73% in September 2016, rose to 62.91% in October 2016. Given its strong weighting in the general price index, the “Food, Beverages and Tobacco” function strongly influenced price developments in October 2016.
At the same time, on the international market, the FAO Food Price Index rose by 0.7% in October 2016, averaging 172.6 points compared to 171.4 points the previous month. The increase in the FAO index is mainly due to higher prices for cereal products, which rose by 1.4 percentage points compared with the month of September 2016. The evolution of food prices on the international market is likely to amplify inflationary pressures via the increase in the import bill of these goods in a context of weak local food availability.
In addition, the month of October 2016 was characterized by a continuous evolution of the depreciation of the gourde. At the end of October the exchange rate was 66.3278 gourdes for one US dollar against 65.5368 gourdes for one dollar the previous month. Consequently, the gourde experienced a depreciation of 1.21% against 1% the previous month. This change in the exchange rate thus influenced the rate of increase in prices in the Haitian economy during the month of October 2016.
Inflation forecasts :
According to forecasts by the Bank of the Republic of Haiti (BRH), inflation will fluctuate over the next three months in monthly terms, while year-on-year inflationary pressures are expected to continue. Considered on an annual basis, the IPC will show a rate of 13.9%, 14% and 14.4% for the months of November 2016, December 2016 and January 2017. On a monthly basis, Rate of +1.3%, +1.1% and +1.4% respectively for the next three months.