Consumers Pay 1.0% More For Goods In August; Inflation Continues to Inch Higher  

  • For August 2023, The All-Jamaica Consumer Price Index (CPI) increased by 1.0% for August 2023 influenced mainly by a 1.4% rise in the index for the division ‘Food and Non-alcoholic Beverages’
  • The increase in food prices was due largely to a 4.0% increase in the index for the class ‘Vegetables, tubers, plantains, cooking bananas and pulses’. Drought conditions continued to adversely affect the supply of agricultural produce resulting in higher prices for some items.
  • The inflation rate for the month was also influenced by a 5.2% increase in the index for the division ‘Information and Communication’, due to higher rates for mobile communication services.
  • Additionally, there was a 0.8% rise in the index for the division ‘Housing, Water, Electricity, Gas and Other Fuels’, resulting from increased rates for electricity, water and sewage and a 1.0% rise in the index for the ‘Transport’ division due to higher petrol prices.
  • The point-to-point inflation rate (August 2022 – August 2023) was 6.8%. The divisions ‘Food and Non-Alcoholic Beverages' (10.9%), ‘Restaurants and Accommodation Services’ (12.0%) and ‘Furnishings, Household Equipment and Routine Household Maintenance’ (11.1%), were the largest contributors to this increase. Tempering these increases, however, was a fall of 1.2% in the index for the 'Transport' division.
  • All classes within the ‘Food and Non-Alcoholic Beverages' division increased for the August 2022 - 2023 period. The key contributor was the class ‘Vegetables, tubers, plantains, cooking bananas and pulses’, which rose by 30.2% as a result of continued drought conditions. The index for the class, ‘Cereals and cereal products’ increased by 5.1%, due to higher prices for bread, flour and rice. Increased prices for other meat products such as chicken, turkey neck, corned beef and other meat products, contributed to the 4.1% rise in the index for ‘Meat and other parts of slaughtered land animals’.
  • The increase in the index of the ‘Restaurants and Accommodation Services’ division was attributable to higher prices for food. The index for the division ‘Furnishings, Household Equipment and Routine Household Maintenance’ was largely impacted by the upward movement in the increase in the National Minimum Wage for Jamaica on June 1, 2023.
  • Moderating these increases was a fall in the index for the ‘Transport’ division due to lower prices for petrol products over the 1 year. The class 'Fuel & lubricants for personal transport equipment' declined by 10.2% for this review period.
  • On August 29, 2023, the BOJ held its monetary policy meeting, where it was deemed appropriate to maintain the policy rate at 7.00% and watch the pass-through effects on deposit and loan rates. Despite inflation inching up over the past few months, point-to-point inflation is anticipated to continue to fall and subsequently enter the BOJ’s target range of 4.0% to 6.0% by the December quarter. The next policy decision will be on the 29th of September, where it is expected that BOJ will continue holding the policy rate at 7.00%.

(Source: STATIN)