Inflation Remains Within Target at 4.3% for June 2021

• The All-Jamaica Consumer Price Index (CPI) rose by 0.7% for June 2021 contributing to the point-to-point inflation rate of 4.3%, which is a drop from the 5.0% reported in May 2021, but still within the target range. 
• A 1.9% increase in the heavily weighted index for “food and non-alcoholic beverages‘’ division was a major contributor due in part to an upward movement of 4.0% in the index for the class ‘Vegetables, tubers, plantains, cooking bananas and pulses’. 
• Higher prices for items within the class ‘Restaurant, cafes and the like’ resulted in the 5.9% increase in the index for the division ‘Restaurant and Accommodation Services’. Additionally, increased petrol prices contributed to the 0.4% increase in the index for the ‘Transport’ division. 
• However, these increases were tempered by the 2.4% decline in the index for ‘Housing, Water, Electricity, Gas and Other Fuels’ division, which resulted mainly from the fall in electricity, water, and sewage rates. 
• For the review period, the calendar year-to-June inflation rate was 2.4%, and the fiscal year to date inflation was 1.9%. 
• Inflation is projected to average 4.8% over the next two years according to Bank of Jamaica. The inflation forecast anticipated that commodity (oil and grains) price inflation would accelerate in the context of global supply chain disruptions and increasing demand as economies reopen, leading to higher domestic transport and processed food inflation. However, this was expected to be tempered by subdued domestic agricultural food price inflation, based on expectations of favourable weather conditions.

(Source: STATIN & BOJ)