Inflation rate in Jamaica remains at a low level for October with the rate receding from 0.5 percent in September to 0.2 percent in the latest compilation by the Statistical Institute of Jamaica (Statin).
The rate of inflation for the calendar year-to-date was 1.1 per cent, while increase for the last twelve months to October is up 1.8 percent. The fiscal year-to-date registered an increase of 2.4 percent and is running well below the central bank’s forecast of 4.5 to 6.5 percent.
The month by month increase for 2016, should end just under 2 percent for the full year, suggesting that its time the central bank adjusts their fiscal rate target sharply down, with the price of oil under pressure and the prospect that electricity rates should decline with Jamaica Public Service switching to LNG to power their Bogue plant.
The fiscal deficit was wiped out by Peter Phillips as Minister of Finance after his fellow minister Omar Davies ran up huge deficit an high inflation under his watch
Higher prices for vegetables and starchy Foods’ with an increase of 1.6 percent and movement for the division ‘Transport’ mainly attributable to higher prices for petroleum locally impacted the overall increase in inflation. A decline in electricity rates charged to consumers helped to moderate the increase.
The continued low inflation is aided by a fall in oil prices and other commodities on the world market but most telling, is the elimination of the huge government fiscal deficit in the past. The large deficit helped to fuel high levels of inflation and severe instability in the rate of exchange for the local currency.
