Business

Prices haven’t increased from new taxes... yet

Jamaica Observer

Wednesday, July 18, 2012 | 5:12 PM    

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KINGSTON, JAMAICA — Prices rose by 0.6 per cent during the month of June.

The outturn was lower than the two to four per cent inflation expected by the Bank of Jamaica (BOJ), as a result of new taxes last month.

General Consumption Tax was lowered from 17.5 per cent to 16.5 per cent while the number of taxed items was increased.

According to the Statistical Institute of Jamaica (Statin), food and non-alcoholic beverages saw the biggest increase — as a group, prices went up by 1.8 per cent.

However, the overall movement was moderated by the 2.3 per cent and 0.6 per cent decline in the index for the divisions 'housing, water, electricity, gas and other fuels' and 'transport'; respectively," said the state agency. This was due to the reduction in international oil prices.

Last month, BOJ Governor Brian Wynter said that most of the inflation expected from the tax measures would occur in the June quarter and then slow down in subsequent quarters.

On Monday, Finance Minister Peter Phillips said that Jamaica might see slightly higher monthly figures later in the year.

However, 'the sluggishness in global oil prices, increased domestic competition and the relatively flat economic performance', he said, were having a dampening impact on price movement.

The inflation rate for the first half of 2012 stood at 3.2 per cent.

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