A big jump in tuition fees at private schools had the biggest influence on the overall level of price increases in September, with the Statistical Institute of Jamaica (Statin) reporting that inflation last month was 0.5 per cent. September’s inflation was, however, not enough to prevent the more keenly watched 12-month rate from dipping to 5.9 per cent – the second time in two years it has dipped in the target range of 4 per cent to 6 per cent.

Still there are indications it could have been even lower had it not been for an 11.8 per cent jump in the education index in September alone. Higher tuition fees for students at private schools, chiefly at the primary level, was the biggest influence on the education index, which was the only one of 13 categories Statin uses to assess inflation, which recorded an increase above 1 per cent. The next biggest price movement in September was a 0.7 per cent increase recorded in both the transport and the alcoholic beverages, tobacco and narcotic categories.

Yet, few would be surprised with the substantive hike in private school fees. Reports a few months ago indicate that private educational institutions were planning to make the adjustment to attract and retain teachers amidst migration and higher salaries for public sector peers.

Based on early reports, fees at these institutions were expected to climb above $20,000 per term.

“The increase is unprecedented but it is necessary in order to align our teachers’ salaries with that of public school teachers,” one principal of a private school was quoted as saying in a notice sent out to parents.

According to Statin’s data, the point-to-point inflation rate for the education division in September was to 15.3 per cent, the highest across all classes and 5.5 percentage points above the usually heavy weighted ‘Food and Non-Alcoholic Beverages’ division which stood at 9.8 per cent.

Both are still twice the national rate, which at 5.9 per cent in September was lower than the central bank was expecting.

“This was 0.9 percentage points lower than the inflation rate for the prior point-to-point period due to lower prices for some agricultural products, as a result of favourable weather conditions,” Statin’s Director General Carol Coy said during a quarterly briefing as she compared September’s 5.9 per cent inflation to August’s rate of 6.8 per cent.

“The chief contributors to the 5.9 per cent inflation rate were the divisions: ‘Food and Non-Alcoholic Beverages’, up by 9.8 per cent and ‘Restaurants and Accommodation Services’, up by 12.0 per cent. These increases were, however, moderated by the 1.9 per cent fall in the index of the ‘Housing, Water, Electricity, Gas and Other Fuels’ division,” Coy continued.

The food and non-alcoholic beverages driven by the continued rise in price for vegetables items, such as yam, sweet potato, tomato, cabbage, and carrot, was also impacted by the classes ‘Cereals and cereal products’ (up by 4.6 per cent) and ‘Meat and Other parts of slaughtered land animals’ (up by 4.2 per cent).

“Increased prices for bread, flour and rice impacted the former class, while higher prices for chicken and other meat products impacted the latter,” Statin also said in its report. Eating meals at restaurants cost 12 per cent more than a year ago as well.

The decline in the index for the ‘Housing, Water, Electricity, Gas and Other Fuels’, the data processing entity said, was, however, influenced by a 6.3 per cent decline in the index for the class ‘Electricity, Gas and Other Fuels’ owing to a fall in electricity charges.

At the end of its September monetary policy committee meeting, the Bank of Jamaica (BOJ), pointing to an uptick in inflation between May (6.1 per cent) and August (6.8 per cent), said, “The higher-than-targeted inflation rate over the past four months is estimated to have continued in September 2023,” meaning it was expecting to see inflation above 6 per cent for a fifth-straight month. It warned then that it could start raising the key policy rate again as higher agricultural and oil prices, tuition fees and wage increases are heightening the risks to meeting the inflation target.

“While the bank is still projecting that inflation will decelerate to the target range in the December 2023 quarter and generally remain there except for some months in 2024, there are risks to this outlook,” the BOJ warned.