Point to Point Inflation Back Within Target Range for the Month of May

• The All-Jamaica Consumer Price Index (CPI) rose by 1.2% for May 2021 contributing to the point-to-point inflation rate of 5.0% which is a significant increase over the 3.8% reported in April 2021, and now puts inflation at the midpoint of the 4%-6% target range. 
• A 3.4% increase in the index for the heavily weighted ‘Housing, Water, Electricity, Gas and Other Fuels’ division caused by a rise in electricity, water and sewage rates, was the main impetus behind the increase in the index. 
• The ‘Food and Non-Alcoholic Beverages’ index also saw a notable rise (1.2%) due to higher prices for starchy tubers. Additionally, a7% rise in the index for the ‘Transport’ division supported by higher fuel prices following the vaccine-led recovery in global oil prices, also contributed to the increase in the CPI. 
• For the review period, the calendar year-to-date (YTD) inflation rate was 1.7%, and the fiscal year to date inflation was 1.2%, while the point-to-point (May 2020 – May 2021) rate was 5.0%. 
• In its May 2021 Monetary Policy Press Statement, the BOJ indicated expected inflation for the June quarter within the range of 3.5% to 4.5%. This is down slightly from the previous forecast of 4.0%-5.0%, based on expectations that agricultural price increases over this period will be smaller than previously anticipated due to better weather conditions. Recently announced price increases for some processed foods, driven by higher imported commodity prices and freight costs, have been taken into account beyond this forecast horizon. However, the forecast is still for inflation to remain within the target range of 4 to 6% throughout the year.

(Source: Statin & BOJ)