Statistics institute says expanding energy supply will stabilise inflation.

The National Institute of Statistics, NIS, has stated that making energy easily affordable and available to all Cameroonians, added to improving road infrastructure so that production zones can easily be accessed, will go a long way to, not only cut the inflationary rate, but also help to stabilise the inflationary trend.



The observation is contained in the national inflation report of NIS which was released on January 21. According to the report, Cameroon’s annual inflation rate dropped to 4.5% in 2024, following two years of sharp price increases. 

The figure, NIS adds, is lower than the 7.0% inflation rate the institute initially forecasted for 2024. In earlier projections, NIS had warned of higher inflation due to a fuel price hike on February 3, 2024, which was expected to drive up costs for transportation, food, and manufactured goods. 

NIS in its latest report advises authorities to continue expanding energy and road infrastructure and improving access to agricultural production areas, stressing that these measures should ensure a stable and affordable supply of food throughout the year. 

Without such efforts, it said rising prices could continue to severely impact household purchasing power, the institute warned.

It insisted that when energy costs increase, inflation rates often follow suit, and vice versa, adding that the interplay between energy prices and inflation is complex and influenced by various factors, including geopolitical events and market dynamics. 

Experts say as global energy demands evolve and political landscapes shift, understanding these connections is crucial for developing effective economic policies and strategies to mitigate the impact on consumers and businesses alike. 

According to the report, improving energy efficiency and diversifying energy sources is vital in managing future energy price fluctuations and their ripple effects on the economy.

NIS insists that the inflation rate hit around 7.0% by the end of 2024, following the direct and indirect effects of the fuel price adjustment effected last year. 

It stated that the outlook in 2024 marks a significant improvement compared to 2023, when inflation was 7.4%, and 2022, when it reached 6.3%.

During those years, rising prices for food and transportation fueled inflation, stated the NIS. In contrast, it added that the year 2024 saw more stable prices, thanks in part to a 0.2% drop in the cost of furniture, household items, and cleaning supplies, as well as stable costs in communication, education, recreation, and culture.

On an upbeat note, NIS states that inflation in Cameroon remains above the 3% benchmark set by the Central African Economic and Monetary Community, CEMAC, which includes the Central African Republic, Congo Brazzaville, Gabon, Equatorial Guinea, and the Republic of Chad. 

Also, the government of Cameroon remains optimistic about bringing inflation down to the 3% target by the end of 2025, the institute assured.

The NIS concludes that despite the progress made in controlling inflation in 2024, its effects in recent years have taken a toll on household budgets, especially for essential expenses. 

 

This article was first published in The Guardian Post Edition No:3354 of Thursday January 30, 2025

 

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