Point-to-Point Inflation Falls to Lowest Level Since April 2021

  • After inching up in May 2025, local consumer prices for June 2025 declined by 0.3% relative to May 2025, while 12-month point-to-point (P2P) growth relative to June 2024 moderated to 3.8%, according to newly released data from the Statistical Institute of Jamaica (STATIN).
  • The monthly decline was primarily driven by a 1.5% decrease in the cost of ‘Housing, Water, Electricity, Gas and Other Fuels’ , amid lower electricity rates and tax on residential electricity charges. Additionally, a 1% drop in cost of ‘Water Supply and Miscellaneous Services Relating to the Dwelling’ also contributed.
  • There was a 0.3% fall in the price of ‘Food and Non-Alcoholic Beverages’, mainly attributable to a 4.9% fall in ‘Fruits and nuts’ prices and a 0.8% decrease in ‘Vegetables, tubers, plantains, cooking bananas and pulses’ prices.
  • However, a 1.4% increase in the ‘Furnishings, Household Equipment and Routine Household Maintenance’ partially countered the declines. This was largely due to an increase of approximately 6.7% in the National Minimum Wage, effective June 1, 2025, which contributed to a 1.8% increase in the price of ‘Goods and Services for Routine Household Maintenance’.
  • With the June price decline, P2P inflation cooled from 5.2% for May 2025 to 3.8% for June 2025, the lowest it’s been since April 2021. The outturn was influenced mainly by ‘Food and Non-Alcoholic Beverages’ (+4.7%), ‘Housing, Water, Electricity, Gas and Other Fuels’(+4.6%), and ‘Restaurant and Accommodation Services’ (+6.1%).
  • Prior to the latest CPI reading, Fitch Solutions forecasted that the BOJ would lower the policy rate by 75bps to 5.00% by December 2025, supported by broadly stable price pressures and inflation expectations. However, Fitch noted that while favourable domestic macro indicators point to additional rate cuts in the near term, ongoing uncertainty in global trade and interest rate policy, as well as recent spikes in geopolitical tensions, would prompt the BOJ to hold rates in August at its next meeting. Given the significant decline in P2P in June, however, there could be heightened expectations for an August rate cut.

(Sources: STATIN, BOJ, & BMI, a Fitch Solutions Company)