Inflation Remains Within Target at 5.3% for July 2021

• The All-Jamaica Consumer Price Index (CPI) rose by 1.5% for July 2021 contributing to the 12-mth point-to-point inflation rate of 5.3%, which is an increase from the 4.3% reported in June 2021, but still within the target range. 
• A 2.3% increase in the heavily weighted index for the “Food and Non-Alcoholic Beverages” division was a major contributor due in part to an increase in the price for some agricultural produce such as yams, potatoes, lettuce, cabbage, onions and tomatoes. 
• Increases in the index for the divisions ‘Housing, Water, Electricity, Gas and Other Fuels’ (1.3 %), ‘Restaurant and Accommodation Services’ (3.2%) and ‘Transport’ (0.8 %) also contributed to the overall inflation rate. 
• Higher prices for meals consumed away from home was the main contributor to the increase in the index for the division ‘Restaurant and Accommodation Services’, while increased toll charges contributed to the rise in the index for the ‘Transport’ division. Additionally, greater electricity, water, and sewage rates influenced the increase in the index for ‘Housing, Water, Electricity, Gas and Other Fuels’ division. 
• Inflation is projected to average 4.8% over the next two years according to Bank of Jamaica. The inflation forecast anticipates that commodity (oil and grains) price inflation will 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, it is expected that this will be tempered by subdued domestic agricultural food price inflation, based on expectations of favourable weather conditions.

(Source: STATIN & BOJ)