Inflation hits new low of 6%

Wednesday, January 18, 2012

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INFLATION came in at six per cent for 2011, the lowest since 2006.

According to the Statistical Institute of Jamaica (Statin), the inflation for the year was driven largely by higher food prices and an upward movement in the price index for the group 'housing, water, electricity, gas and other fuels'.

"This was due to higher cost of oil on the international market and the increased rates in the utilities electricity and water, which were the main contributing factors," said Statin.

Food and non-alcoholic beverages saw a 5.4 per cent increase in prices, compared to 12.3 per cent increase for housing, water, electricity, gas and other fuels, but it made up close to 40 per cent of the inflation basket.

The cost of fruits and sugars as well as tea and coffee saw the highest increases in prices under food and beverages.

The lowest price mover for the year was the division 'restaurants and accommodation services', which increased by 2.3 per cent over 2011.

Higher cost for 'food consumed away from home' contributed mainly to the increase.

While the calender year inflation rate was six per cent in comparision to 11.7 per cent in 2010, the fiscal year-to-date movement at 5.5 per cent was 1.8 percentage points below the 7.3 per cent movement that occurred for the period March to December 2010.

In other words, inflation is in line with official projections made by the Bank of Jamaica and the Planning Institute of Jamaica. They estimated inflation will come in at six to eight per cent for the 12 months to March 2012.

Furthermore, inflation during the months of January and February are typically low or negative.

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