The Bank of Jamaica has said the prices of goods and services will rise higher than the rate of 13-15 per cent, which it had earlier projected for this financial year starting in April and ending in March next year.
According to BoJ Governor Derick Latibeaudiere, inflation or the rate of price increase for the first three months of the new financial year is running higher than expected at 5.7 per cent
The Governor’s disclosure comes against the recent announcement of increases in electricity rates and anticipated hikes in bus and route taxi fares.
The price rises are being pushed by agricultural and international commodity price movements and the impact of the Government’s tax measures, Mr. Latibeaudiere said. He was speaking at a quarterly economic briefing at the bank’s downtown Kingston head office.
Drought and bush fires in the previous three-months undercut agricultural output in the subsequent period, he reported. Agricultural prices play a very significant role in the measurement of inflation or price movements in Jamaica.
Increases in the rate of general and special consumption taxes and an increase in international crude oil prices also drove up prices during the period. General consumption tax moved up by 1.5 percentage points to16.5 per cent and Special Consumption taxes moved up by almost 50 per cent.
Governor Latibeaudiere expects movement in the prices of goods and services to moderate during September relative to the outturn for the June quarter.
The Central Bank’s projection of a13-15 per cent inflation for the financial year contrasts significantly with Government’s nine per cent inflation target for the period. The target is important as an agreement between Government and trade unions representing public sector employees is based on moderate increase in prices.