According to a recent report by IGD, there’s a slight decline in food price inflation, which is indicative that it may have peaked. This news aligns with IGD’s forecast, which shows that the inflation rate dropped from +19.1% in March. James Walton, Chief Economist at IGD, confirms that the driving forces behind the price hikes are losing their momentum. The reduced prices of energy, fertilizers, and some basic food commodities have played a significant role in easing the inflation rate.
Despite this smidgen of good news, it’s important to note that the system still needs to work through other cost increases. Consequently, the general public will still have to bear the burden of inflation for the foreseeable future. However, the food retail industry is highly competitive, and businesses have a strong incentive to pass on any benefits of lower costs to shoppers.
With this in mind, the process of reducing prices in the food retail sector has already begun. Supermarkets have started cutting prices for everyday items such as milk, bread, and butter in April and May. Not to mention, there are several variables in play, and weather and crop yields are always hard to predict.
Despite the uncertainties surrounding the food retail sector, IGD expects that food price inflation will gradually begin to slow down in the upcoming months barring any unforeseen major shocks. This news is sure to bring some relief to the public, which has been beset by rising food prices.
IGD’s next economic Viewpoint report will be released on 8 June, exploring what’s next for food inflation. Keep a lookout for this report if you’re interested in keeping abreast of the latest developments in the food retail sector.