Who Is Walking the Walk Amidst 13.8 Inflation?
The BNR is talking the talk of moderation; while NISR is posting such alarming piece of statistic—a 13.8% revised inflation. But who is walking the walk here?
NISR is just a messenger. Thanks for their recent revised reports which pointed out many of the measures such as consumer spending, producer prices, import prices and commodity prices, most of which—if not all—have a double digit annualised inflation today.
My one of many takeaways amongst NISR interesting prints here is that of 13.8% inflation on consumer goods. These are the types of goods, such as fresh and dry food, soft drinks, etc., that everyday consumers must have to survive.
— NISR (Rwanda) (@statisticsRW) August 10, 2016
To me, inflation rate is a lagging indicator because it shows what consumers have already paid or are currently paying on goods and services. Therefore, the answer is: us consumers are walking the walk.
On investor’s perspective, given such inflation, one must post a hell of a return on investments to break-even before taxes let alone make a profit. As a civil servant, one’s wage growth must match such inflation in order to keep up with consumers’ short-term and durable goods spending while maintaining other investable assets.
Is that simultaneously happening? I hardly think so. Yes, there many moving parts in macroeconomics, but a double digits inflation rate is a little out of hand, especially on consumer goods. And if not well handled, this piece of data can cause spillovers just like falling dominos. Somebody should be asking serious questions.
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