Inflation Rate Ends 2024 Up; but Not Out

  • Point-to-point inflation increased to 5.0% in December, disrupting four consecutive months of disinflationary trend[1]. With December’s outturn, the point-to-point inflation rate (P2P) of 5.0% is 70 basis points (bps), higher than the P2P reading in November (4.3%) but 190bps lower than December 2023’s outturn of 6.9%.
  • The average price paid for goods and services by Jamaican consumers rose in December, as reflected in a 1.2% increase in the All-Jamaica Consumer Price Index (CPI). The upward movement in the index for the ‘Food and Non-Alcoholic Beverages’ division (+1.9%), specifically in the ‘Vegetables, tubers, plantains, cooking bananas and pulses’ class was the main driver of the increase. Notable price increases were seen across all classes in the division, especially for sweet peppers, sweet potatoes, tomatoes, cabbage, and eggs.
  • Also contributing to the increase in December 2024 was an increase in the ‘Housing, Water, Electricity, Gas and Other Fuels’ index (+2.4%), reflecting higher household rental costs and electricity rates. However, aided by lower fuel prices, the index for the ‘Transport’ division fell by 0.3%.
  • ‘The Housing, Water, Electricity, Gas and Other Fuels’ and ‘Restaurants and Accommodation Services’ was influenced by higher household rent and electricity rates and higher prices for food purchased from fast food restaurants and cookshops, respectively.
  • The ‘Transport’ division fell by 0.3%. This decline was attributable to a fall of 1.8% in the index of the class ‘Fuels and Lubricants for personal transport equipment’ due to lower petrol prices.
  • Overall, average consumer prices for 2024 ended at 5.6%, within the BOJ's target range of 4.0%–6.0%. Inflation is expected to remain within this range over the next eight quarters. Still, uncertainties surrounding the potential changes to economic policies among Jamaica’s main trading partners remain an upside risk. However, the timing and the extent of the policy changes are still highly uncertain.

(Sources: STATIN & NCBCM Research)

 

[1] Inflation decreased consecutively from 6.5% in August 2024 to 4.3% in November.