The Central Bank said yesterday that latest data released by the Central Statistical Office indicate that headline inflation, measured by the 12-month increase in the Index of Retail Prices, slowed slightly to 9.1 per cent in March 2012 from 9.2 per cent in February.
On a monthly basis however, the overall price level decreased by 0.7 per cent in March following an increase of 1.6 per cent in February. Food price inflation, which has been the principal cause of the relatively-high headline inflation rate, increased marginally to 20.3 per cent in the twelve months to March from 20.2 per cent in February.
The main contributors to food price inflation were increases in the prices of fruits (59.9 per cent) and vegetables (17.7 per cent). Faster price increases were also recorded for oils and fats (19.1 per cent in March compared with 17.9 per cent in February).
The rate of price increases however, slowed for bread and cereals (5.2 per cent compared with 5.9 per cent in February), fish (12.6 per cent compared with 13.6 per cent in February) and milk, cheese and eggs (7.5 per cent compared with 8.6 per cent in February).
Core inflation, which excludes movements in food prices, has remained relatively unchanged indicating that underlying inflationary pressures have been contained so far. On a year-on-year basis, the core inflation rate measured 1.8 per cent in March 2012, the same rate as in the previous two months. The sub-indices for clothing and footwear and alcoholic beverages posted increases of 2.9 per cent and 2.4 per cent respectively, somewhat slightly higher than in previous months.
Private sector credit continued to expand in February 2012, albeit at a slower pace than in the previous two months. Credit granted by the consolidated financial system to the private sector slowed to 2.3 per cent (year-on-year) in February from 3.4 per cent and 3.7 per cent in January 2012 and December 2011, respectively.
Among major categories of private sector credit, consumer credit and business lending slowed in February to 2.2 per cent and 2.8 per cent (year-on-year) respectively from 2.5 per cent and 5.7 per cent in January. Real estate mortgage lending continued to maintain its pace of expansion, increasing by 9.4 per cent (year-on-year) in February from 8.7 per cent in January.
Liquidity in the domestic financial system retreated in April from the high levels recorded previously as a result of the liquidity absorption measures adopted by the Central Bank in March as well as a relatively small net domestic fiscal injection in April. Commercial banks' holdings of excess reserves at the Central Bank averaged $3.5 billion daily in the first three and a half weeks of April compared with $5.6 billion in March 2012.
