Consumer prices see highest increase in years

Consumer prices increased by 2.8 percent in the third quarter of 2013 compared to a year earlier, the largest price jump since the fourth quarter of 2008.

Residents have to pay more, particularly for health insurance, education services and tobacco products. Hotels in Cayman were also able to up their room rates ahead of the holiday season.

“This is the highest inflation rate since December 2008,” stated Minister for Finance and Economic Development Marco Archer. “A few items showed sharp price increases, such as tobacco products and health insurance.”

The 100 percent duty increase for tobacco products, introduced in September 2012 resulted in a 49.2 percent price rise for the year.

The average premium for health insurance was 59.6 percent higher compared to the same period in 2012, following the introduction of payments towards an indigent fund and the expansion of benefits.

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“We are closely monitoring these price changes. It is expected, however, that the inflation rate for these items will normalize in the future quarters; that is, the annual impact of the factors causing the increases will taper off,” Minister Archer said.

Hotels increased their room rates 15.2 percent. Tuition fees for tertiary education moved up by 12.5 percent. Pre-primary and primary education and secondary education also recorded increases of 3.3 and 3.1 percent, respectively.

The prices of clothing jumped 3.9 percent and footwear was on average 4.8 percent more expensive than a year earlier.

Energy costs for electricity, gas and other fuels climbed a further 4.7 percent.

In contrast, housing costs, such as actual rentals, continue to decline (-2.2 percent). Imputed rentals for owner occupied housing were 3.2 percent lower than in September 2012. As housing accounts for about one third of the basket of goods and services used for the consumer price index, the drop in housing costs helped offset some of the large price increases in other categories.

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