Prices in Jamaica rose 0.4 percent on average in September compared to August 2015, the Statistical Institute of Jamaica (STATIN), reported. Inflation in August recorded an increase of 0.8 percent. According to the Statin report. The All Jamaica ‘All Divisions’ Consumer Price Index increased, with the index moving from 229 to 230.
The calendar year-to-date movement was 2.6 percent, while for the last 12 months, year over year inflation stood at 1.8 percent.
Increases in cost in the Education category, amounted to 5.3 percent due to the increase in tuition fees, the second highest movement was for the division Food and Non-Alcoholic Beverages which moved up by 1.1 percent. Two divisions recorded declines which moderated the overall movement in inflation with Housing Water, Electricity, Gas and other fuels fell by 1.2 percent and the Transport division is down by 1 percent.
The other divisions that recorded increases are: Alcoholic Beverages and Tobacco 0.1 percent, Clothing and Footwear 0.6 percent, ‘Furnishings, Household Equipment and Routine Household Maintenance 0.1 percent, Health 0.2 percent, Recreation and Culture 0.5 percent and Miscellaneous Goods and Services 0.2 percent while the divisions of Restaurants and Accommodation Services and Communication each recorded negligible movements.
Inflation moderates in September
Business sector don’t get it
Jamaica has to rely on the private sector, to help lift it from the economic quagmire it finds itself in, for the past 3 decades. A look at certain data shed some light on the task the country faces.
It tells of a nation where the business sector leaders seem to be managing more from the seat of their pants than based on properly informed position. Take the case of inflation, which ran at 5.1 percent up to August, for 2014, for an average of just less than 0.68 percent per month, and against the back ground of slippage in the exchange rate in the early months that would have helped spike inflation then. With an almost stable Jamaican dollar in September a survey done by the Statistical Institute of Jamaica on behalf of the Bank of Jamaica to ascertain the expectations of Chief Executive Officers, Managing Directors and Financial Controllers about the future movement of prices in September this year, to which 270 responded, found that their expectation for inflation for 2014, will end at 10.2 percent. On what basis is they arrive at this forecasted amount.
Interestingly, the official inflation rate to October is 7.3 percent, the full year’s figure should hoover around this level with the price of oil on the world market having declined sharply, pulling some local cost down with it.
The business sector record on business confidence both on the current state as well as a year out has no better record as ca be seen from the wild fluctuation in the periodic results.
On the matter of Treasury bill rate, while rates have been declining monthly from a peak in March, this year. The survey respondents expected the rate for the 182 day Treasury bill to come out at 8.6 percent at a time the rate had already declined to 8 percent. Admittedly, the interest rate forecast is not totally inconsistent with the managerial group inflation forecast, as investors would want to be compensated with an interest rates above the inflation as they see it. But if the inflation rate forecasted is as high as the private sector figures there would also be need for a greater slippage in the rate of exchange for the Jamaican dollar versus the US dollar. Yet their perception that the exchange rate would slip by 1.3 percent by the end of 2014 from September, would not be in keeping with the high inflation rate they projected.
