Transport biggest contributor to June inflation - Prices climb 11.5 per cent in six months

Published: Friday July 18, 2008

The cost of living has risen substantially in the first half of the year with new data from the Statistical Institute showing inflation at 11.5 per cent, with prices rising faster in the capital than other towns and in the countryside.

The new data indicates that prices are growing at an annual rate of 23 per cent, or about two per cent per month. Fiscal inflation is at six per cent, or 24 per cent annualised, well ahead of the projected 14.5 per cent inflation that the central bank has forecast.

Last year, six-month calendar inflation was 5.1 per cent, an indication that prices in the current period are advancing at more than twice the pace than the comparative period a year ago.

For the month of June, inflation was a flat two per cent, largely pushed by transport costs, as well as higher gas prices, heavier utility bills, fuel and other costs generally associated with running a household.

In all divisions

"Increases were recorded in all the divisions during the month of June," said Statin, "with the exception of 'communications' and 'education' for which there were negligible movement."

Food prices, usually at the top of the list as a major driver of inflation, also grew in June, but not as fast as alcohol and tobacco, the household and transport categories, and even recreation.

Jamaica is currently paying about US$100 per barrel for oil from Venezuela, Prime Minister Golding said in Parliament Tuesday, but the price, though concessionary, moves in tandem with the performance of world oil which is trading around US$135 per barrel to US$147 per barrel.

In Jamaica, a litre of regular gasolene at the pumps crested $90 during the month at some stations, but was selling as low as $82 in the past week, while electricity bills have risen - mostly the fuel component - by about 14 per cent in this year, with the average household paying more than $4,000 per month for electricity consumption.

Adding up

Water rates were also increased by 28 per cent, adding to the cost of maintaining a household.

Food inflation for June hit 2.1 per cent, while at the top of the spectrum, the index for transport rose 2.9 per cent.

In the geographic regions, inflation in Kingston was 2.5 per cent, in other towns, 1.9 per cent, while in the rural areas, prices moved by 1.6 per cent.


Source: Jamaica Gleaner
http://www.jamaica-gleaner.com/gleaner/20080718/business/business4.html