FOOD prices are rising, but much less rapidly than a year ago.

The Central Bank on Friday issued a statement strongly suggesting an ease-up in food inflation, the Monetary Policy Announcement for September 2023.

The report also cited improving figures for GDP and business credit, with the only negative being unemployment.

The bank's Monetary Policy Committee (MPC) kept its repo rate at 3.50 per cent, the interest rate it charges to lend money to private banks overnight, and a possible tool to either stimulate or dampen economic activity.

"The committee considered that domestically, the buoyancy in private-sector credit, alongside the sustained deceleration in inflation, were helping to foster a steady revival of economic activity without demand pressures at this time."

Globally, despite resilience earlier this year, ongoing inflation, high interest rates, and geopolitical tensions pose current constraints to economic activity.

The International Monetary Fund’s (IMF's) July forecast is for global growth to slow from 3.5 per cent in 2022 to 3.0 per cent in 2023, the MPR said.

"Headline inflation in many countries has declined on account of lower food and energy commodity prices along with the easing of supply chain issues."

Worldwide, several central banks, including those in the US and UK, paused interest-rate hikes at the end of the third quarter of 2023.

"Domestically, data from the Central Statistical Office (CSO) indicate that real GDP grew by 3.0 per cent (year-on-year) in the first quarter of 2023 reflecting strong expansion in the non-energy sector (4.2 per cent) accompanied by marginal growth in the energy sector (0.3 per cent)."

In the second quarter of 2023, indicators pointed to a steady rise in activity in major non-energy sectors including transportation and storage, wholesale and retail trade (excluding energy), electricity and water (excluding gas) and construction.

Unemployment rose from 4.7 per cent in the fourth quarter of 2022 to 4.9 per cent in the first quarter of 2023.

Headline inflation continued to ease up.

While the June MPR had said headline inflation fell from 8.7 per cent in December 2022, to 6.0 per cent in April 2023, to 5.7 per cent in May 2023, the September report now indicated 4.7 per cent in July and then 4.1 per cent August 2023 (year-on-year).

The current report said, "The deceleration in headline inflation came from slower price movements in food as core inflation remained unchanged.

"Food inflation slowed to 5.6 per cent while core inflation (which excludes food items) remained at 3.7 per cent."

In contrast, the June report had indicated previous double-digit food-price inflation, which fell from 17.3 per cent in December 2022, to 11.2 per cent in April 2023, to

9.7 per cent in May 2023, and is now reported at 4.7 per cent.

Three past MPRs indicate food inflation at 10.3 per cent in July 2022, 11.6 per cent in September 2022, and 17.3 per cent in January 2023.

The June report had attributed that easing of food inflation to "declining inte