The annual inflation rate for food in April stood at a whopping 9.19%, according to the National Statistics Office, pushing up the overall inflation rate to 5.67%, figures released this week reveal.
In April, the annual rate of inflation as measured by the RPI was 5.67%, up from 4.43% in March of this year. The annual rate compares inflation in a particular month with the same month of the previous year and could be influenced by seasonal effects.
The report identified that the highest annual inflation rates in April were registered in Housing (15.06%) and Food (9.19%). On the other hand, the lowest annual inflation rates were registered in Water, Electricity, Gas and Fuels (0.00%) and Clothing and Footwear (1.92%). It also noted the largest upward impact on annual inflation was registered in the Food Index (+1.98 percentage points), largely due to higher prices of take-aways.
The second and third largest impacts were measured in the Housing Index (+1.19 percentage points) and the Recreation and Culture Index (+0.62 percentage points), mainly on account of higher prices of house maintenance services and hire of premises, respectively. An impact is a measure showing the change in inflation as a result of the inclusion of an index. Such an impact takes into account both the weight and the annual rate of inflation by group.
The RPI measures monthly price changes in the cost of purchasing a representative basket of consumer goods and services and is closely linked with the Cost-of-Living Adjustment (COLA) increases and periodic rent payment adjustments. A closely related measure of price movements is the Harmonised Index of Consumer Prices (HICP). The RPI focuses on private households only whereas the HICP covers private households, institutional households (such as retirement homes) and foreign visitors to Malta.
Back in February, the country’s Central Bank warned the projected annual inflation in Malta would accelerate in 2022, reflecting higher prices for services and food. In its publication Outlook for the Maltese Economy 2021-2024, the Central Bank of Malta said it had revised its inflation predictions upwards by 0.7 percentage points for 2022, to reach 2.7%.
“The upward revision in 2022 reflects stronger than projected inflation outcomes in recent months, as well as the intensification of import price pressures brought about by global supply-chain disruptions. It also reflects the increase in prices of several food items during the start of the year,” the bank said in its report.
The rise in food prices is projected to continue in 2022, largely due to higher inflation for unprocessed food. Processed food prices are also expected to increase sharply, reflecting the indirect impact of higher energy prices and poor harvests globally. The bank also warned that retailers are expecting to raise sales prices. However, import price pressures are expected to gradually normalise over the course of the year “as the current mismatch between global demand and supply dissipates”.