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AfricaMoney | June 27, 2017

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Inflation likely to be low in the forthcoming months: Bank of Mauritius inflation expectation survey

Inflation likely to be low in the forthcoming months: Bank of Mauritius inflation expectation survey

Also, 80.9 % of respondents considered that there was an increase in the prices of goods and services while 8.5% of respondents viewed that prices were unchanged and 10.6% were of the opinion that prices had gone down.

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 2.5% for December 2015.

The Bank of Mauritius carried out its 28th IES in August 2015 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, 47 responded to the survey.

Concerning the 1.5% headline inflation rate for the month of July 2015, 55.3% of respondents considered this rate as being low, while 38.3% of them judged it to be appropriate. 6.4% of respondents deemed it high

74.5% of respondents observed that prices of goods and services had gone up over the preceding 12 months, while 14.9% cent were of the opinion that prices had gone down, while 10.6% of respondents viewed that prices had remained unchanged.

Regarding the three main factors that accounted for the prevailing inflation pattern for the prevailing inflation pattern 53.2% of them indicated that external factors accounted for the primary source of inflation in Mauritius. The change in exchange rates of the rupee was considered by 42.6% of respondents as being the second most important factor. The change in aggregate demand was regarded by 51.1% of respondents as the third most important factor.

In addition regarding the movement of prices over the next 12 months, 80.9% of respondents stated that they expected prices to go up, while 10.6% of them said that they were anticipating a decline in prices. 8.5% of respondents envisaged that prices would remain unchanged.

Besides, respondents were also asked to provide their expectations of headline inflation for December 2015, June 2016 and a year ahead. Ø December 2015 and June 2016: 91.5% of respondents were expecting the rate of inflation to be below 4.5% while 8.5% of respondents were anticipating the inflation rate to range between 4.5% and 6.5%. None of the respondents were envisaging an inflation rate of over 6.5%.

Finally for a year ahead, 83.0% of the respondents were expecting the inflation rate to be lower than 4.5% while 17.0% them were anticipating the inflation rate to be between 4.5% and 6.5%. None of the respondents were anticipating that the inflation rate would exceed 6.5%.

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