Infographic: Inflation accelerates slightly in April

Source: NSI

Comment:

In April, consumer price inflation accelerated slightly, reaching 3.68% on an annual basis, compared to 3.60% in March, according to the latest NSI data. For the second consecutive month, the most serious growth was reported by food and beverage prices – 5.76%, compared to 5.61% in March. Meanwhile, clothing and footwear prices continued to fall (and were the only category to report deflation in April). A larger breakdown by category of goods shows that for the third consecutive month, service price inflation slowed, reaching 3.60% in April, while both food and non-food price inflation accelerated.

Transport prices rose by 3.83% year-on-year in April, marking a significant acceleration in inflation from 2.43% in March. This was expected, given that petrol and diesel prices continued to rise in April, as they had in March. This was in turn due to the rise in oil prices on global markets.

Despite another acceleration in inflation in April, we may already be witnessing some stabilization, after price inflation jumped from 2.67% in December to 3.60% in March. The latest acceleration in its pace is not as significant as those recorded in previous months, despite the Easter holidays. As we have been repeating over the past few months, we believe that we will soon witness a weakening in the inflation rate, which will be lasting, because we expect a further slowdown in economic activity in the second half of the year.

Yes, GDP growth accelerated in the first quarter, according to the latest NSI data, but we believe this will not be sustainable and overall economic activity this year will be weaker than it was last year. This is mainly due to external factors, such as weak activity in key foreign markets such as Italy, Germany and Turkey, which we have discussed more than once.

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