Local Point-to-Point Inflation Falls Further; 5.2% in May  

• Consumer prices rose 0.5% in May 2024, with the All Jamaica Consumer Price Index (CPI) rising to 134.9 from 134.2 in April.
• The main contributor to this movement was a 1.1% increase in the index for the heaviest weighted division, ‘Food and Non-Alcoholic Beverages’. The index for the class ‘Vegetables, tubers, plantains, cooking bananas and pulses’ rose 5.2% during the month on the back of higher prices for some agricultural produce, primarily vegetables, due to lower supplies resulting from dry weather conditions.
• The inflation rate was also impacted by a 0.6% increase in the index for the ‘Housing, Water, Electricity, Gas and Other Fuels’ division, which was largely influenced by higher electricity rates. However, the overall rate of inflation was tempered by a 0.1% fall in the index for the ‘Transport’ division due to lower petrol prices.
• Despite the increase in the CPI in May point-to-point inflation rate (May 2023 – May 2024) was 5.2%. This was 0.1 percentage point lower than the 5.3% recorded for April 2023 to April 2024. The divisions making the largest contribution to the point-to-point inflation rate were ‘Food and Non-Alcoholic Beverages’ (3.9%), ‘Transport’ (9.7%) and ‘Housing, Water, Electricity, Gas and Other Fuels’ (3.8%). The calendar year–to-date inflation rate as of May 2024 was -1.3%.
• At its last monetary policy meeting in May, the BOJ kept its policy rate at 7.00% as it continued to monitor the pass-through effects of previous adjustments on deposit and loan rates. The next policy decision will be on the 28th of June, when it is expected that BOJ will maintain its policy rate at 7.00%.
• While inflation has fallen over the last four months, farmers are still grappling with drought conditions. If these conditions persist, it may continue to put upward pressure on food prices, the largest component in the CPI basket.

(Sources: STATIN and NCBCM Research)