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AfricaMoney | October 19, 2017

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Inflation likely to be low in June’15: Bank of Mauritius inflation expectation survey

Inflation likely to be low in June’15: Bank of Mauritius inflation expectation survey

Also, 75.6% of respondents considered that there was an increase in the prices of goods and services while 15.6% of respondents viewed that prices were unchanged and 8.9% were of the opinion that prices had gone down. (Image: Banks Bahrain)

The Inflation Expectations Survey (IES) recently conducted by the Bank of Mauritius (BoM) showed that the majority of respondents — who were chosen from the financial and real sectors of the economy to respond to the survey — expect that headline inflation will be less than 4.5% for June 2015.

On the other hand, 20.0% of respondents were expecting inflation to range from 4.5% to 6.5% while 2.2% of the respondents were anticipating inflation to be above 6.5%.

The Bank of Mauritius carried out its 25th IES in November 2014 in which questions about headline inflation and the respondents’ expectations were raised.

From the 50 stakeholders chosen from the financial and real sectors of the economy, 45 responded to the survey.

Concerning the 3.8% headline inflation rate for the month of October 2014, 66.7% of respondents perceived this rate as being appropriate while 20.0% of respondents judged it to be low.

In addition, 75.6% of respondents considered that there was an increase in the prices of goods and services while 15.6% of respondents viewed that prices were unchanged and 8.9% were of the opinion that prices had gone down.

Regarding the three main factors that accounted for the prevailing inflation pattern, 77.8% of respondents indicated that ‘external factors’ were viewed as accounting for the primary source of inflation in Mauritius.

However, ‘change in exchange rates’ and ‘change in aggregate demand’ were regarded more or less at par as being the other key factors.

Concerning the movement of prices over the next 12 months, the survey outlined that 82.2% of respondents expected prices to go up, while 6.7% of respondents anticipated a decrease in prices.

Additionally, 11.1% of respondents expected that prices would remain unchanged.

Besides, the respondents were requested to provide their expectations of headline inflation for June 2015, a year ahead and December 2015.

The survey showed that for the month of June 2015, 77.8% of the respondents were expecting inflation to be less than 4.5%, 20.0% of respondents were expecting inflation to range from 4.5% to 6.5% and 2.2% of the respondents were anticipating inflation to be above 6.5%.

For the month of December 2015, 55.6% of the respondents were expecting inflation to be less than 4.5%, 42.2% of respondents were expecting inflation to range from 4.5% to 6.5% and 2.2% of the respondents were expecting inflation to be beyond 6.5%.

Finally, as regards a year ahead, 57.8% of the respondents were expecting inflation to be lower than 4.5%, 40.0% of respondents were expecting inflation to be within 4.5% to 6.5% and 2.2% of the respondents were anticipating inflation to be above 6.5%.

Broadly speaking, the mean headline inflation rates expected by respondents were 4.1%, 4.2% and 4.4% respectively, for June 2015, a year ahead and December 2015.

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