The Cen­tral Bank re­port­ed yes­ter­day that food prices rose by 3.9 per cent in Feb­ru­ary, but core in­fla­tion (which ex­cludes food prices) fell by 0.1 per cent.

In its mon­e­tary pol­i­cy an­nounce­ment for March 2025, the Cen­tral Bank not­ed that both do­mes­tic and in­ter­na­tion­al fac­tors con­tributed to the up­ward drift in food prices faced by lo­cal con­sumers.

"The re­cent 7 per cent in­crease in the price of ce­ment is nonethe­less ex­pect­ed to have an im­por­tant knock on ef­fect on con­struc­tion costs," said the Cen­tral Bank.

On the growth front, the Bank said the de­cline in oil and nat­ur­al gas out­put, based on ma­tur­ing fields, con­tin­ued to pose a chal­lenge to over­all pro­duc­tion of en­er­gy-based ex­ports over the short run.  

It said da­ta from the Min­istry of En­er­gy point­ed to a year-on year re­duc­tion in the pro­duc­tion of crude oil (-1.9 per cent) and nat­ur­al gas (-0.8 per cent) dur­ing the third quar­ter of 2024.  

How­ev­er, the re­port high­light­ed that petro­chem­i­cal out­put im­proved with am­mo­nia and methanol pro­duc­tion ris­ing by 16.1 per cent and 1.1 per cent, re­spec­tive­ly.  

Mean­while, the Bank said in the non-en­er­gy sec­tor, the lat­est avail­able GDP da­ta from the Cen­tral Sta­tis­ti­cal Of­fice (CSO) for the first half of 2024 high­light­ed pos­i­tive per­for­mances in the man­u­fac­tur­ing and fi­nance sec­tors, but these were some­what off­set by de­clines in the con­struc­tion and ac­com­mo­da­tion ser­vices sec­tors.  

“More re­cent in­di­ca­tors, in­clud­ing dis­tri­b­u­tion, fi­nance, new car sales, and vis­i­tor ar­rivals for Car­ni­val 2025, point to rel­a­tive buoy­an­cy in non-en­er­gy ac­tiv­i­ties,” The Cen­tral Bank said. 

It not­ed that while the Gov­ern­ment tapped the do­mes­tic mar­ket for bud­get fi­nanc­ing, banks were si­mul­ta­ne­ous­ly able to boost their lend­ing to the pri­vate sec­tor.  

“Pri­vate sec­tor cred­it from the con­sol­i­dat­ed fi­nan­cial sec­tor rose by 8.4 per cent (year-on-year) in Jan­u­ary 2025 com­pared with 8.0 per cent a month ear­li­er. Con­sumer loans grew by 11.6 per cent com­pared with 9.7 per cent for busi­ness cred­it and 6.4 per cent for re­al es­tate mort­gage loans,” the re­port said. 

The bank’s mon­e­tary pol­i­cy re­port agreed to main­tain the re­po rate at 3.50 per cent.