TUNIS — Tunisia's annual inflation rate fell to 5.1 percent in July from 5.3 percent in June, the National Institute of Statistics reported on Wednesday, extending a slowdown that began in the spring — the rate stood at 5.5 percent in May.

The INS attributed the move mainly to food. Prices in the food and beverages group rose 6.6 percent year on year in July, down from 7.1 percent in June. Two groups moved the other way: tobacco accelerated to 1.3 percent from 1.0 percent, and restaurants and hotels to 6.5 percent from 6.3 percent.

Core inflation — which strips out fresh food and administered prices — eased to 4.8 percent from 4.9 percent.

Why the headline number and the shopping basket disagree

A falling rate does not mean falling prices. It means prices are rising more slowly than they were. For a household, what registers is the level, and the level in the categories bought weekly is still climbing fast.

Sheep meat remains the sharpest increase in the food basket at 16.7 percent over twelve months, though that is down from 18.3 percent in June. Fresh fruit accelerated to 13.8 percent from 11.0 percent. Beef was broadly flat at 13.7 percent against 13.6 percent, and poultry slowed to 12.5 percent from 13.5 percent. Fresh fish rose 11.6 percent. Against that, edible oils fell 22.7 percent over a year, a much steeper drop than the 5.5 percent recorded the previous month.

So a shopper buying meat, fruit and fish is experiencing something closer to double-digit inflation, while the published figure reads 5.1 percent. Both are accurate. They are measuring different things: one is a weighted average across the whole consumption basket, the other is the part of it that cannot be postponed.

The split the INS keeps flagging

The most persistent structural signal in the release is the gap between price regimes. Products whose prices are set freely rose 6.2 percent over the year; products under administered prices rose 1.1 percent.

That divergence is a policy fact, not a market accident. Administered prices are held down by subsidy and price control, which suppresses the measured index while transferring the cost onto the public budget. The free-price segment — which includes most fresh meat, fruit and fish — carries the full weight of supply conditions: herd size, feed costs, water, transport, and the number of intermediaries between producer and stall.

The recurring appearance of red meat at the top of the list, month after month, points to the supply side rather than to monetary conditions. Monetary policy can slow demand; it cannot enlarge a national flock.

What comes next

The Central Bank of Tunisia has kept its policy rate unchanged at recent meetings, taking the position that the slowdown in inflation needs to be confirmed before any change in monetary policy. July's figure is a further data point in that direction, though not on its own a decisive one: core inflation is easing by a tenth of a point a month, and the food component remains volatile.

The immediate question for the coming months is whether the fruit and vegetable seasonal effect, which pushed fresh fruit up in July, reverses in the autumn, and whether the fall in edible oil prices holds. If both do, the headline rate has room to keep sliding. If red meat stays where it is, the gap between the official rate and household perception — the "vie chère" sentiment that no index captures — will persist regardless of what the headline number does.