Grand Cayman’s average Consumer Price Index ended up at 3.2 per cent for 2007, 11 per cent less than the 3.6 rate forecasted in the government’s Strategic Policy Statement issued in late November.
The Economic and Statistics office issued its report 2007 Annual Inflation report last week showing the less-than-expected average CPI.
However, the rate would have been considerable higher had there not been a significant 8.7 per cent decline in the average price in housing. Housing is weighted to count for nearly one-third of the entire CPI basket of goods and services.
The decline in the price of rent, maintenance and insurance more than made up for the eight per cent higher cost in utilities in this category.
2007 started off with a 4.4 per cent first-quarter jump in the CPI, mainly due to higher average prices of personal goods and services, household equipment and food.
The rate fell to 3.0 per cent and 3.1 per cent for the second and third quarters respectively, before dipping to 2.4 per cent in the fourth quarter.
For the year, the average price of household equipment – led by the cost of furniture and floor coverings – was up 9.1 per cent over the average price in 2006.
The 2007 average price of personal goods and services was up 5.9 per cent over the previous year, mainly due to sharp increases in the costs of maid services and gardeners.
The average price of food items also increased significantly, up 5.4 per cent over the average cost in 2006. Clothing was also up 4.5 per cent over the average cost the previous year.
The alcohol and tobacco category saw a minimal 1.4 per cent average price increase in the whole of 2007 compared to 2006, and a comparison of prices in December of each year actually showed a two-per-cent decrease.
The quarterly inflation rates in 2007 were all higher than those of 2006, but much lower than those in the post-Hurricane Ivan recovery period in 2005, when housing costs in particular were very high.
The CPI is determined by comparing the prices of 661 items of goods and services in Grand Cayman each quarter.