Local Inflation Cools in March but Consumers Are Not Out Of the Woods Yet

• The average price paid for goods and services by Jamaican consumers decreased in March 2024 as reflected in a 0.5% decrease in the All-Jamaica Consumer Price Index (CPI). The decrease was influenced mainly by a downward movement in the heaviest weighted index, the ‘Food and Non-Alcoholic Beverages’ division (1.8%), amid lower prices for some agricultural produce such as cabbage, carrot, escallion, tomato, sweet potato, and yam.
• Tempering this decline were increases in the ‘Housing, Water, Electricity, Gas and Other Fuels’ and ‘Transport’ divisions of  0.9% and 0.2%, respectively. The increase in the ‘Housing, Water, Electricity, Gas and Other Fuels’ division was due to higher electricity rates while the increase in the ‘Transport’ division was primarily driven by higher petrol prices.
• The point-to-point inflation rate (March 2023 – March 2024) was 5.6%. This was 0.6 percentage points lower than the 6.2%  from February 2023 to February 2024. The main contributor was the lower rate of increase for the heaviest-weighted division ‘Food and Non-Alcoholic Beverages’ which rose by 4.8% in March compared to 7.7% in February.
• At its last monetary policy meeting in March, 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 20th of May when it is expected that BOJ will maintain its policy rate at 7.00%.
• While inflation has fallen over the last two months, farmers in Western Jamaica are now grappling with drought conditions. If these conditions persist, it may put upward pressure on food prices, the largest factor in the CPI basket.

 (Source: STATIN)