Inflation Moves Further Outside BOJ’s Target; Third Consecutive Month of Increase for the CPI

The average price paid for goods and services by Jamaican consumers decreased in January, as reflected in a 0.1% decrease in the All-Jamaica Consumer Price Index (CPI). The downward movement in the index for the ‘Food and Non-Alcoholic Beverages’ division (0.7%), as a result of lower prices for agricultural produce such as yam, Irish potato, cabbage, carrot, and tomato due to increased supplies, was the main driver of the decrease.
Also contributing to the decline in the January 2024 CPI was lower transportation costs. The index for the ‘Transport’ division fell by 1.1% due to a reduction in the bus fare for adults charged by the Jamaica Urban Transit Company (JUTC) and lower fuel prices.
However, the CPI movement was tempered by a 0.8% increase in the 'Housing, Water, energy, Gas and Other Fuels' index due to increasing charges for energy, water, and sewage. Additionally, the 'Recreation, Sport, and Culture' index increased by 1.5%, primarily due to increased ticket rates for films and stage shows.
However, the point-to-point inflation rate (January 2023 – January 2024) rose to 7.4% from 6.9% in December. This was influenced mainly by the point-to-point inflation rate for the divisions: ‘Food and Non-Alcoholic Beverages’ (8.9%), ‘Transport’ (9.5%), and ‘Housing, Water, Electricity, Gas and Other Fuels’ (4.6%). The year-to-date inflation rate for the fiscal year was 7.3%, while the calendar year–to–date as of January 2024 was 0.1%.
At its last monetary policy meeting in December, the BOJ kept the policy rate at 7.00% as it continued to monitor the pass-through effects of previous adjustments on deposit and loan rates. The next policy decision will be on the 20^th of February, when it is expected that BOJ will maintain its policy rate at 7.00%.

(Source: STATIN)