While the longer-run inflationary trend (or core inflation) remained subdued with the inflation rate for 2000 registering 3.6 per cent compared with 3.4 per cent in 1999, short run supply shocks continue to impact the level of retail prices. In 1998 floods and drought contributed to a spike in the annual inflation rate.
A similar situation occurred in 2000 as flood damage adversely affected the supply of fruits and vegetables in November and as a consequence prices rose sharply towards the end of the year.