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Trade Outlook
September 2019 Inflation Update: Deflation
October 07, 2019 16:27

Prices headed lower in September 2019. On a monthly basis, consumer prices declined by 0.27%, or below August’s inflation of 0.12% mom. The monthly deflation also came in below our estimate of -0.15% mom and the median market expectations of -0.15% mom. September 2019’s mom deflation was also lower than the mom deflation recorded in September 2018 (-0.18% mom) and the inflation recorded in September 2017 (+0.13% mom). In more detail, prices in the core and administered components were stable at 0.29% mom and 0.01% mom. Prices in the volatile component, however, were sharply lower (-2.26% mom).

On an annual basis, consumer prices rose at a slower pace (3.39% yoy vs. 3.49% yoy in the previous month). Prices in the non-foods component rose 0.20% mom but fell in the foods component (-0.96% mom).

Compared to August 2019, the easing inflationary pressures were mostly driven by deflation in foodstuff prices (-1.97% mom), with prices in the other CPI components increasing at a slower pace. The prices of chilis, onions, chicken meat, and tomatoes declined, while the prices of rice, spinach, and mustard greens remained stable.

Higher gold and jewelry prices lifted prices in the clothing component (+0.72% mom), while prices in the education component (+0.47% mom) decelerated given the academic year is already underway. Prices in the other CPI components also rose at a slower pace in September 2019, namely: the medical care component (+0.32% mom), the prepared foods