|In a monthly note the Bank of the Republic of Haiti analyzes the evolution of the Index of Consumer Prices (IPC) in Haiti during the month of January 2016 and bring some explanatory elements for understanding the factors that influenced the evolution of inflation during this month. BRH also presents forecasts for the next three months.|
“Evolution of overall inflation :
In January 2016, inflation, as measured by the change in the consumer price index, stood at 13.3% yoy. By increasing 80 basis points compared with December 2015, annual inflation continued its upward trend started since May 2015. Between May 2015 and January 2016, the inflation rate was multiplied by 2. Considered on a monthly basis, inflation maintained the same rate of growth recorded in the previous month, or 1.1%. The cumulative monthly inflation over the first 4 months of the fiscal year 2015-2016 reached 3.9% against 2.2% in the same period of the previous year
Evolution of inflation according to the origin of products :
On a monthly rate, the index of prices of local and imported products showed the same variation of 1.1% in January 2016 against 1.2 and 1.1% respectively in December 2015. Over the year, the IPC of local products grew faster than imports. Established at 14% and 8.9% each in December 2015, the annual inflation rate of local products and the imported products were brought to 14.8% and 9.7% respectively.
Explanatory factors of the evolution of inflation in January 2016:
The weakness of agricultural production and the continued depreciation of the gourde are the main factors that explain the rise in inflation in January, 2016.
- Weakness of agricultural production : following the drought for several years, which has intensified in 2015, under the effect the phenomenon ‘El Niño’, farmers have lost up to 70% of their harvest in some areas. This led to a drop in food production and, consequently, higher prices of basic products, the latter having, in some instances doubled.
- Continued depreciation of the gourde: During the month of January 2016, the depreciation of the local currency against the US dollar has continued. Indeed, the exchange rate increased from 56.6970 gourdes in December 2015 to 59.4546 gourdes for one dollar during the period under review, a depreciation of 5% in January 2016 compared to the previous month.
Inflation forecast :
For the next three months of the fiscal year 2015-2016, the inflation forecasts of Statistics Department of the BRH augur an upward trend in inflation both in monthly variation than yoy. Indeed, annual inflation is expected to be 13.5% in February, 13.9% in March and 14.1% in April 2016. On a monthly basis, forecasts indicate levels of 0.5%, 0.8% and 0.7% for the next three months.”