Consumer prices and inflation rate show annual increases

POSTED: 11/24/11 8:35 AM

St. Maarten – Figures released by the Department of Statistics shows that the consumer price index of 117.8 recorded in October is 0.3 percent higher than in August and 3.9 percent higher than October, 2010. Those same figures also show that the rate of inflation, which has shown steady growth since April 2011, has increased by 2.63 percent between October 2010 and October 2011. This is the highest peak over the past 2-year period.

The consumer price index measures changes in the price level of consumer goods and services purchased by households and inflation is a sustained increase in the general level of prices for goods and services.

Expenditure Categories

Six of the nine expenditure categories became more expensive in October 2011, whilst two expenditure categories became cheaper. Namely the categories; Food (+5.5%), Beverages and Tobacco (+2.5%), Clothing and Footwear (+1.4%), Household Furnishing & Appliances (+0.7%), Medical Care (+0.8%) Recreation & Education (+0.2%) and Miscellaneous (+0.4%) are amongst the more expensive whilst prices of Housing (-0.6%) and Transport & Communication (-1.5%) are slightly cheaper.

A Closer Look

The categories with the largest influence in the basket are Food (10%), Housing (39%) and Transport & Communication (20%). Even though the expenditure category Food has the third largest weight factor; it recorded the largest price increase (+5.5%) in October compared to August 2011 and had the largest overall influence on the total index. The expenditure category Clothing & Footwear has a less significant impact (7%) on the total index, however it recorded the second largest price increase (+2.5%) in October compared to August 2011.

Food

All nine food groups became more expensive. The following increases were recorded in each food group; Grain (+2.6%), Meat and Fish (+7.7 %), Fats & Oils (+2.7%), Dairy Products (+4.5%), Potatoes, Vegetables & Fruit (+9.9%), Sugar & Chocolate (+2.4%), Pre-cooked dishes (+0.4%) Eating-out (+3.8%) and other food resources (+3.8%).

More specifically the following products largely influenced the total price change within the food group: Grains largely influenced by; Brown Bread (+12.6%), Biscuits (+18.9%), Pasta(+4.8%) and Cereal (+3.4%). The food group Meat & Fish was largely influenced by; Beef (+12.3%), Steak (-30.6%), Boneless Pork Meat (+13.9%), Pork loin (+25%), Ham (-3.3%), Chicken & Chicken Organs (+3.5 %), Pigtail (+11.7%), Fish (+58%), Salted Fish (+17.4%) and Other Shellfish (+33.4%).

The food group Fats & Oils was largely influenced by; Cooking oil (+3.5%). The food group Dairy Products was largely influenced by; Canned Milk (+6.9%), Milk Powder (+4.7%), Cheese (+3.7%) and Eggs (+18.1%). The food group Potatoes, Vegetables & Fruit was largely influenced by; Cabbage (+12%), Legumes & Green Beans (+38.6%), Carrots (-7.5%), Onions & Garlic (+13.7%), Tomatoes (+26.6%), Paprika (+6.6%), Other Vegetables (56.7%), Frozen Vegetables (+11%), Apples and pears (+19%) Miscellaneous Citrus Fruit (+118%), Other Fresh Fruit (+10.5%) and Raisins (+9%). The food group Sugar & Chocolate was largely influenced by Sugar (+5.2%).

Housing

Three of the five product groups that fall under Housing became more expensive whilst one remained unchanged and one became cheaper. Dwelling costs (+0.4%), and House maintenance (+0.2%), Garden maintenance (+18.2%) were amongst the more expensive product groups while energy expenses (-5.0%) became cheaper.

More specifically it must be noted that the products Electricity (-6%) largely influenced the total price percentage change recorded in the product group Energy Usage. The product group Garden Maintenance was largely influenced by fertilizer and soil (+65.5%).

Transport & Communication

The product group Vehicle Expenses decreased by 4.8 percent and Communication decreased by 0.5 percent. The price change in Gasoline (-12.4%), Diesel (-7.7%), Motor Oil (-2.9%) and Grease (+36.2%) largely influenced the total price change within the product group Vehicle Expenses. The product group Communication was largely influenced by Mobile phones (-22.9%).

Inflation October 2011

The 12-month average of consumer prices was 3.9 percent higher in October 2011 than in October 2010. This represents an increase in the inflation rate of 2.63 percent within the mentioned period.

All nine expenditure categories recorded inflation in October 2011. Housing at a rate of 4.4 percent, Transportation and Communication at a rate of 4.0 percent, and food prices inflated at a rate of 6.8 percent

Inflation has been climbing over the prior 2-year period and has shown a step-like incline since April of this year growing from 2.5 percent to 3.9 percent in October 2011. The current inflation represents the highest peak over the past 2-year period.

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