Inflation Breaks Upward Trend; Consumer Prices Fall in February

The average price paid for goods and services by Jamaican consumers fell in February 2024, as reflected in a 0.6% reduction in the All-Jamaica Consumer Price Index (CPI). The downward movement in the index for the ‘Food and Non-Alcoholic Beverages’ division (1.1%), was a result of lower prices for some agricultural produce such as cabbage, carrot, escallion, tomato, sweet potato, and yam.
Also contributing to the decline in the February 2024 CPI was a fall of 1.6% in the index for the ‘Housing, Water, Electricity, Gas and Other Fuels’ division due to lower electricity rates, which resulted in a 4.7% fall in the index for the group ‘Electricity, Gas and Other Fuels’.
However, the overall decline in the CPI for February was tempered by an increase of 0.3% in the index for the ‘Transport’ division. The largest contributor to the increase in the division’s index was the group ‘Operation of Personal Transport Equipment’, which had an upward movement of 1.1% due mainly to higher petrol prices.
With the favourable movements in February, point-to-point inflation rate (February 2023 – February 2024) was 6.2%, down from 7.4% in January. Fiscal year-to-date inflation rate was 6.6%, while the calendar year-to-February inflation was -0.7%.
Despite the easing of price pressures in February, the BOJ’s Monetary Policy Committee is likely to maintain the central bank’s policy rate at 7.00% when it meets on March 28^th, as it continues to monitor the pass through effects of previous rate adjustments.
On a positive note, so far this month local produce prices have continued to decline, on the back of improved supplies. However, there are risks that inflation could trend upward in subsequent months, given the anticipated PPV fare increase in April, as well as an increase in international commodity prices and shipping costs, which have already started to increase this month.

(Sources: STATIN & NCBCM Research)