Food and Energy Costs Impact Inflation Rate

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Economy

Thursday, 19 July 2012 02:30

By caribarena news

Antigua St. John’s – The cost of food and energy continue to drive up the country’s inflation rate which calculated the annual rate of inflation to be 3.9 per cent in June 2012.

According to the Consumer Price Index (CPI), Food and Energy are the dominating factors influencing the inflation rate as food prices increased by 5.1 per cent over the 12-month period from June 2011, and the Fuel and Light index increased by 2.5 per cent over the same period.

Four sub-groups continue to influence the Food category, with the average price changes for Dairy products increasing by 17.6 per cent; Fats and Oils by 13.5 per cent; Food N.E.S (not elsewhere specified) by 5.8 per cent; and Sugar, Jams and Confectionery by 4.0 per cent.

When Food is removed from the All Items index, the inflation rate is 3.5 per cent and when Food and Energy are removed from the All Items index, the inflation rate is 4.0 per cent. This indicates the overall effects of rising prices of food items and energy products and services on inflation, the CPI release said.

However, there was no change in the All Items index between May and June 2012. The index for the Food category showed a decrease of 0.1 percentage point between May 2012 and June 2012.

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The meat category had a decrease of 2.4 per cent, due to price reduction in the meat sub-categories. Poultry prices recorded a decrease of 4.2 per cent and mutton recorded a decrease of 3.7 per cent.

The category Alcoholic Drink and Tobacco showed a reduction of 0.4 per cent - a reduction in the average price of local rum attributed to this decrease.

Meanwhile, Furnishings, Supplies and Operations recorded an increase of 0.1 percentage point, and household supplies contributed to this as the average price for laundry soap increased from $1.92 to $2.08, and matches increased from $2.38 to $2.46.

The sub-category of transport services recorded an increase of 0.2 percentage point. The increase in airline fares to Puerto Rico contributed to this increase as the average price for a return flight increased from $848.44 to $992.43 per person.

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