St. Maarten’s 2011 inflation rate set at 4.6 percent

POSTED: 01/20/12 12:51 PM

St. Maarten – The Department of Statistics has set the inflation rate at 4.6 percent when they compare figures from December 2011 and December 2010. This represents a 43.75 percent increase in the inflation rate in that 12 month period.
The rate of 4.6 percent is comparable with the figure recorded in 2008 (4.6 percent) and is the highest peak over the past 2-year period. The end figure reflects the step like pattern of increases that began in April, 2011 when inflation was 2.5 percent. A comparison by year shows that inflation has been steeply climbing in the past three years, moving from 0.7 percent in 2009 to 4.6 percent in 2011. Over the past 20 years there are six years in which the recorded inflation rate exceeded 3.0 percent, namely; 1991(3.5%), 1997 (3.2%), 2005 (3.1%), 2008 (4.6%), 2010 (3.2%) and 2011 (4.6%).

A closer look
An assessment of the relative contributing factors for 2011 and 2008, when the same inflation rate was established, shows some significant differences in the share of these contributing factors. For example the share the housing and the food expenditure categories are more significant in 2008 versus 2011. Yet the expenditure category Transport & Communication had greater influence in 2011 than it had in 2008.
Food, Housing and Transport & Communication have the largest influence percentage upon the total inflation rate; namely 10%, 39% and 20% respectively. Significant fluctuations in the annual inflation recorded for the expenditure category food; ranging from 3.0 percent to 13.7 percent was observed over the past 6-year period. Four of the nine expenditure categories have reached record high inflation in 2011 compared to the past 6-year period.

Housing
The product prices for housing, which is the largest group in the consumer basket, inflated by 4.5%. Dwelling costs (72.5%) and Energy expenses (16%) carry the largest influence upon the total and the group Energy expenses has been very volatile over the past six years. Energy expenses is mostly influenced (~83%) by the rate of electricity. Prior to the implementation of the new tariff structure in August 2011 there are more fluctuations in the rate per kWh and the price was steadily increasing.

Transport & Communication
The expenditure category Transport & Communication is the second largest group comprising the consumer basket on St. Maarten. The product prices within this group inflated by 4.7 percent in 2011. This is a significant increase compared to the rate recorded in 2010 (1.3%). The 2011 rate is mostly influenced by the product groups Vehicle purchase (+9.4%) and Vehicle expenses (9.1%). Gasoline carries the largest influence (34%) within this product group.

Food
The expenditure category Food is the third largest group in the consumer basket on St. Maarten. The product prices within this group inflated by 9.1 percent in 2011. This is comparable to the 2009 rate for this category (9.3%) but given its lower overall influence; the 2009 inflation rate was still lower than in 2011.
The food groups Cereal products, Meat & Fish, Dairy products and Potatoes, Vegetables & Fruit, which carry the largest influence, each experienced a sharp inflation in price in 2011. The high inflation recorded amongst the food groups of Meat & Fish and Potatoes (11.2 percent) and Vegetables & Fruit (13.7 percent) are significant.

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