Low base and higher fuel prices cause hefty increase in consumer price inflation

Highlights:

April’s year-on-year (y/y) headline consumer price inflation (CPI) rate increased to 4,4% from 3,2% in March.
Month-on-month (m/m) CPI rose by 0,7% in April, the same as in March and February.
April’s y/y headline CPI was heavily influenced by a low base and increases in fuel, food and new vehicle prices.
A low base caused underlying CPI to trend upward as reflected by the 3% y/y increase in core CPI (2,5% in March) and 3,9% y/y increase in the Trimmed Mean Index (3,5% in March).
Headline CPI is expected to breach the 4,5% mark targeted by the Monetary Policy Committee (MPC) in May.
However, our view is still for the repo rate to remain unchanged this year.

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