Point-to-Point Inflation Now Back Within BOJ’s Target Range  

• For April 2023, the All-Jamaica Consumer Price Index (CPI) decreased by 0.4% when compared to the previous month. Most notably, this pushed the point-to-point inflation rate lower for April, and at 5.8% it is now within the BOJ’s target range of 4.0 to 6.0% for the first time since July 2021.
• For April, the decline in monthly inflation was largely driven by the 4.2% decrease in the index of the ‘Housing, Water, Electricity, Gas and Other Fuels’ division. It was lower due to declining electricity rates. There was also a decline in the index for the ‘Transport’ division which moved down by 0.1%, primarily because of reduced costs of petrol and air travel.
• The inflation rate was, however, tempered by a 0.6% increase in the index for the heaviest weighted division ‘Food and Non-Alcoholic Beverages’. This was due to higher prices for some agricultural produce such as sweet potato, yam, lettuce and tomato.
• The point-to-point inflation rate as of April 2023 was 5.8%. This was influenced mainly by the point-to-point inflation rate for the divisions: ‘Food and Non-Alcoholic Beverages’ (10.3%) and Restaurants and Accommodations Services’ (16.8%). These upward movements were, however, tempered by a 3.1% decline in the index for the group ‘Housing, Water, Electricity, Gas and Other Fuels.’
• On May 19, 2023, the BOJ will host its monetary policy meeting and we anticipate that the bank will continue holding the policy interest rateat 7.0% as inflation continues to abate due to the continued pass-through effects of previous rate hikes and food and energy prices continue to come down.

(Source: STATIN)