A rebound in inflation was recorded in March 2020, at 6.2%, year-on-year, compared to 5.8% in February 2020 and 7.1% a year earlier, marking a break in the disinflationary trajectory that began at the beginning of 2019, according to the note of the Central Bank of Tunisia (BCT) published on Tuesday on “Economic and Monetary Developments/April 2020”.
According to the BCT, this trend is the mark of the rise, in particular, of fresh food prices and, to a lesser degree, of the acceleration of administered prices.
In terms of fresh food products, prices accelerated sharply in March 2020 (6.7% year-on-year (YoY), against 4.5% in February 2020) concerning the overstocking behaviour that accompanied the decision to general lockdown.
This rebound is essentially attributable, on the one hand, to the recovery in vegetable prices (+4.3% YoY against -1.7%) which was combined with the strengthening of fruit prices (+13.8% YoY against +12.8%), poultry prices (+2.3% YoY) and the rise in the price of fresh foodstuffs (+3.8% YoY against +3.8% year-on-year). On the other hand, prices of eggs (+4.0% in absolute terms against +4.3%) and red meat (+6.7% in absolute terms against +6.9%) slowed down.
As for administered prices, the increase continued, in March 2020, at a higher rate than the previous month (6.3% YoY against 5.7% in February 2020 and only 4.4% in March 2019), in direct relation with the upward adjustment of tobacco prices (28.0% YoY against 22.3%).
Deceleration of core inflation in March 2020
On the other hand, core inflation rather slowed down in March 2020, despite the pick-up in headline inflation, to stand at 6% compared to 6.1% in February 2020 and 7.6% a year earlier.
This slowdown was favoured, in particular, by the ongoing fall in olive oil prices (-21.4% over one year against -20.5% in February 2020) and car prices (-2.5% in both February and March 2020) which was combined with the deceleration of the rate of increase in clothing and footwear prices (6.7% in March 2020 after 7.5% in February and 8.9% in March 2019 ), construction materials and housing maintenance (7.1% against 7.7% and 11% in March 2019), household equipment (6.4% against 7.3%), and to a lesser degree, prices of vehicle maintenance services and accommodation
These developments were partially offset by the acceleration in prices of dairy products (11.5% vs. 9.5%) and canned food (11.0% vs. 9.2%) and by the rebound in banking service charges (6.2% vs. 2.1%).