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Inflation hits record low in Yemen

Sanaa, May 12, 2014

Yemen's annual inflation rate eased to 6.7 per cent in February, its lowest level since December 2012, mainly due to reduced pressure from often volatile prices for food, tobacco and mild stimulant qat leaf, central bank data showed.

The country saw annual consumer price growth slowing gradually to 7.4 per cent in January from a 16-month peak of 14.5 per cent last June.

However, core inflation, which excludes prices of food, tobacco and qat leaf, remained elevated at 8.8 per cent in February, slightly down from 8.9 per cent in the previous month, which was the highest level since August 2012.

The core measure is partly held up by clothing and footwear prices, which soared 30.8 per cent year-on-year for the third month in a row in February, the data showed.

Inflation dived at the end of 2012 as political unrest in Yemen subsided and economic activity showed signs of recovery from two years of turmoil.

That led the central bank to slash interest rates by five percentage points from October 2012 to February 2013, bringing them to a three-year low of 15 per cent.

Headline inflation averaged 7.1 per cent during this period and core inflation 7.3 per cent.

Consumer prices grew 11 per cent in 2013.

Food inflation decelerated to 4.4 per cent year-on-year in February from 5 per cent in January, the data showed.

Meanwhile, price growth for tobacco, cigarettes and qat leaf slipped to single digits, growing 9.3 per cent year-on-year after a 12.2 per cent jump in the previous month.

On a monthly basis, living costs in Yemen rose 0.4 per cent in February, slightly faster than January's 0.1 per cent increase.-Reuters
 




Tags: inflation | yemen |

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