The consumer price index continued to fall for the first quarter of 2016, according to the most recent economic measures from the Economics and Statistics Office.
“This is the fifth consecutive quarter of deflation since the first quarter of 2015, resulting largely from the continued reduction in fuel prices and import duty reductions on diesel used by Caribbean Utilities Company,” said Finance Minister Marco Archer.
The drop in fuel prices contributed to lowering prices across the economy for water and electricity, gas and transportation. The consumer price index fell 2.8 percent during the first quarter compared to the same period the year before. The first quarter of this year fell by 0.8 percent compared to the last quarter of 2015.
“This can be traced mainly to the seasonal decline in accommodation service fees, as well as the fall in fuel prices,” Mr. Archer said.
Prices have been falling since the beginning of 2015. The first quarter of 2015 saw prices slip into negative territory with 0.4 percent deflation. Prices had been rising since 2011 and the global economic crisis of the last decade, but began the fall toward negative territory through 2014.
The last year to record a drop in the consumer price index was 2009. Over the following years, prices grew by at least 1.2 percent annually, but then ended back in negative territory in 2015 with 2.3 percent deflation.
Maria Zingapan, director of the Economics and Statistics Office, wrote in response to email questions that the falling prices are directly related to the oil market.
“This is, of course, an offshoot of the downtrend in global prices. Hence, it should not have negative impacts on the well-being of consumers,” she said. “On the contrary, it means that the average household can have a little … extra money for spending in other items, all other things held constant.”
Prices for water supply and related services dropped by almost 15 percent in the quarter, a record, according to the ESO. The index covering electricity, gas and other fuels fell by more than 12 percent.
Housing prices have also dropped. Ms. Zingapan said it is possibly “due to excess supply of housing units; however, this seems to have stabilized as actual rentals did not show any movement between the last two quarters” of 2015.
According to the report, the price for “actual rental” housing dropped by 1.6 percent and “imputed rentals” of owner-occupied housing fell by 11.1 percent.
The price basket
Many prices across the economy fell over the past year. The ESO records average prices at grocery stores to track the value of money compared to select items people regularly buy. The price of milk, for example, fell from $6.72 for a gallon of regular Vitamin D milk to $6.51. The price for a package of bacon dropped by more than $1.30.