Annual headline (all items) inflation continued on a downward trend in May 2021, recorded at 1.9% down from 2.1% in April 2021, a latest report shows.

According to the monthly economic update for the Ministry of Finance Planning and Economic Development, the reduction majorly arose from the decline in annual inflation for Food and Related items from -1.6% in April to -5.7% in May 2021. The decline in annual food and related items inflation was majorly due to a 0.4% reduction in prices for food and non-alcoholic beverages during the month.

On the other hand, core inflation increased slightly from 2.9% for the year ended April to 3.1% for the year ending May 2021 majorly driven by annual service inflation which increased from 6% to 6.7%. During the month of May, prices particularly went up for Transport services; Restaurants and Accommodation Services; and Education Services by 1.0%, 0.7% and 0.6% compared to 0.7%, 0.1% and 0.0% the previous month, respectively.

In addition, prices went up for liquid fuels particularly diesel, petrol, and kerosene during the month of May 2021. The headline PMI posted 56.5 in May, down from April’s reading of 57.8 but still above the 50.0 threshold. Of the key indicators used to compute the PMI; output, new orders and employment were all rising over the course of the month.

The Composite Index of Economic Activity (CIEA) registered a 0.87% increase from 143.79 in March to 145.04 in April2021 indicating an improvement in the level economic activity during the month