Prices down by 0.1 per cent after first quarter 2009

The Cayman Islands’ consumer price report for the first quarter 2009 showed that Cayman’s year-on-year inflation rate decreased by 0.1 per cent in March 2009.

The inflation rate is determined on the basis of a Consumer Price Index composed of 661 goods and services from more than 100 outlets on Grand Cayman. The individual items are weighted according to their importance in the average household budget.

According to the report, released last Thursday by the Economics and Statistics Office, the overall slight drop in consumer prices was mainly due to the lower average cost of housing (-7.6 per cent), clothing (-5.6 per cent) and transport and communication (-0.7 per cent) compared to March 2008.

The largest item housing accounted for one third of the CPI. It benefitted both from a 7.5 per cent drop in rents and insurance as well as a 13.7 per cent fall in the cost of electricity.

However, the cost of household equipment (12.5 per cent), food (7.5 per cent) and education and medical expenses (3 per cent) increased between March 2008 and March 2009. Vegetables, oils and fats and meat showed the highest food price increase over the twelve month period.

On a quarterly basis inflation slightly increased by 0.1 per cent between December 2008 and March 2009. The cost of personal goods and services, alcohol and tobacco and education and medical expenses were the highest price drivers in the basket of goods, but all items increased by less than 1 per cent.

In contrast, the 2.4 per cent drop in clothing prices balanced the price increase of other items in the first quarter of 2009.