Inflation rises

Cayman’s inflation remains within earlier predictions, with higher average prices for personal goods and services, according to a Government Information Services release.

The current rate of inflation is contributes to a 0.6 per cent increase in the consumer price index at 30 June, compared with the similar date last year, the statement adds.

Overall, there were higher charges for personal goods and services. These it is conjectured were mainly due to a 14.6 per cent average increase in holiday-related prices – particularly accommodation – coupled with home entertainment (7.3 per cent) and outside entertainment (4.6 per cent). Additionally, the average cost of domestic services rose by 3.1 per cent, owing to increases in wages for domestic helpers.

Other categories recording increases were: clothing (6.9 per cent); transportation and communication (3.8 per cent); and alcohol and tobacco (3.0 per cent). Similarly, food went up by 0.4 per cent, and education and medical increased by 0.9 per cent.

Conversely, housing, which accounts for a third of the entire CPI basket, was 5.3 per cent below the June 2005 figure, owing largely to a reduction in rental prices.

The household price index fell by 2.4 per cent, chiefly because of an 11 per cent drop in the price of floor coverings and a 4.1 per cent drop in china, glass and ironmongery costs.

For one month each quarter the Economics and Statistics Office collects price information across Grand Cayman on more than 500 items, bought by consumers in more than 100 shops and other outlets.

The items are assigned numerical weights, depending on their importance in the total pattern of consumer spending for a specific ‘basket’ of goods (the benchmark for consumer spending is a 1990-91 household income and expenditure survey).

In spite of this marginal increase in inflation, government’s target for 2006 remains as predicted at 3 per cent. This forecasted inflation was recently presented by the Financial Secretary Kenneth Jefferson, during the 2006-07 budget presentation in the Legislative Assembly.

According to the ESO’s June 2006 report, ‘Taking into account the results of the two CPI surveys in 2006, March and June, they bring the average inflation for 2006 so far to -0.5 per cent.’

The full June 2006 inflation report can be found on the ESO website.

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