Consumer prices are falling not rising, insists Bank of Jamaica governor Brian Wynter.

Prices fell by half-a-per cent in February resulting in fiscal year inflation dipping to under seven per cent up to February (11 months), he said utilising state data from Statistical Institute of Jamaica (Statin).

It would result in amongst the lowest inflation rates in two decades for the island. Jamaica’s inflation rate regionally ranks in the top three highest in Latin America and the Caribbean.

“A lot of these figures are unheard of in Jamaica,” stated Wynter whilst addressing the AMCHAM Pre-budget Economic Forum at the Knutsford Court Hotel in Kingston last week. “This year’s target is lightly to be achieved. I think this is an important fact.”

AMCHAM, the American Chamber of Commerce of Jamaica has over 200 members and is headed by executive director Becky Stockhausen.

Wynter also criticised a recent news article indicating that food prices rose 25 per cent year on year.

“I read it with great interest. But I couldn’t find a 25 per cent food price increases. Food and non-alcoholic beverage from February to February went up by 7.8 per cent…At the end of the day 25 per cent and 7.8 per cent…these two things are not adding up.”

Wynter recently projected at another forum that Jamaica’s inflation rate would drop further towards First World lows in three years. He said “that all things being equal” it would positively impact on reducing interest rates which already are at 7.25 per cent the lowest in three decades.

The BOJ’s mandate according to Wynter is to achieve low and stable inflation in line with that of major trading partners roughly five per cent in the long-term. Jamaica however recorded double digit inflation for the 2010 calendar year at 11.4 per cent.

Jamaica has never achieved inflation under five per cent since 1989. Its best calendar performance was in 2006 at 5.7 per cent but most years the country recorded double-digit inflation according to BOJ data. For instance, Jamaica recorded the third-highest inflation rate among 22 regional nations in 2010, according to data released January by a United Nations body, the Economic Commission for Latin America and the Caribbean (ECLAC). Only Trinidad & Tobago and Venezuela at 12.5 per cent and 27 per cent respectively recorded higher inflation. Jamaica however has achieved high single digit inflation between 1997 to 2002.

Jamaica’s real Gross Domestic Product (GDP) contracted between zero to 1.0 per cent during the December quarter reflecting a weak economy amidst strong fiscal accounts stated Wynter. Net International Reserves (NIR) stood at US$2.17 billion at December 2010 which was US$351.4 million above targets set by the IMF programme.