Cayman experienced deflation in 2009

The
Cayman Islands has experienced a period of deflation in 2009, data released by
the Economics and Statistics Office showed.

It
was the first time full year-on-year price levels dropped as the average
inflation rate for the year reached -1.3 per cent.

Overall
prices fell furthest during the third quarter with -2.9 per cent before
recovering slightly showing an inflation rate of -0.6 per cent in the fourth
quarter of last year, according to the most recent consumer price report.

The
strong deflationary trend in the third quarter was due to lower housing,
utilities and fuel costs (-6.4 per cent) and falling prices in the areas of
transport (-8.8 per cent), health (-6.2 per cent), communication (-1.9 per
cent) and clothing and footwear (-1.1 per cent).

In
the fourth quarter, however, health costs increased again strongly by 14.9 per
cent.

Housing
still showed price deflation at -3.2 per cent, driven largely by falling rental
prices, whereas electricity, gas and other fuel costs increased.

The
prices for clothing dropped by 2.3 per cent in the fourth quarter of 2009 and
prices for vegetables, oils and fats, milk, cheese and eggs also softened.

The
price of furniture and furnishings as well as tools and garden equipment also
dropped in the last three months of 2009.

Accommodation
services such as hotels discounted their prices by over 20 per cent during the
period.

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