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Inflation dips but Cost-of-Living sticks

Local News 19 Oct, 2023 Follow News

Inflation dips but Cost-of-Living sticks

Premier Wayne Panton

By Staff Writer

The Consumer Price Index (CPI) for the second quarter of 2023 was 4.1 per cent higher in comparison to the corresponding quarter of 2022, reports the Cayman Islands Economics and Statistics Office(ESO).

However, comparing the inflation rate for the first quarter of this year (January to March) compared to the second quarter(April to June) shows a marginal decrease of  -0.1 per cent.

According to the ESO in its report to June this year, the cost of living continues to be a major concern with the Consumer Price Index (CPI) for the same period calculated at 130.4, with higher price indices recorded in 10 of the 12 categories used to monitor the price of goods and services.

Noting the heavy impact of inflation on the cost of living Hon. Premier and Minister for Finance & Economic Development, Wayne Panton said, “The residual effects of the pandemic and Russia’s invasion of Ukraine have contributed to prices rising more quickly than usual over the last few years. These price increases also have the effect of raising the cost of living across our islands, especially for the most vulnerable Caymanians.”

Mr Panton also said: “We know this is worrying for many people and families and this remains one of the top priorities for this Government. Indeed, tackling the cost of living is one of the challenges this administration grapples with each day. Every morning, we wake up seeking solutions that bring meaningful relief to the people of this country.”

The latest update released by the Economic and Statistics Office(ESO) shows that the leading contributors to the overall increase in the cost of living include a 10.7 per cent rise in the Household Furnishings and Equipment category, along with a 7.0 per cent rise in the Food and Non-alcoholic Beverages category.

There was an upward movement of 6.0 per cent in costs for Housing and utilities, while Clothing and Footwear, along with Miscellaneous Goods and Services recorded increases of 4.7 and 4.3 per cent, respectively. A 3.9 per cent increase in Alcoholic Beverages reflects increases in the average prices for spirits, alcoholic cordials and wine. 

A 6.0 per cent increase in Housing and Utilities was primarily the result of the 15.3 per cent rise in the index for Electricity. The index for water supply also increased by 10.0 per cent. Furthermore, actual rentals paid by tenants rose by 9.0 per cent, while materials for the maintenance and repair of dwellings featured an increase of 10.6 per cent.

Looking into the inflation rate, the ESO said a comparison of Quarter-on-Quarter inflation for the three months to March June 2023 compared to the next quarter ending in June shows a decline of 0.1 per cent.

Commenting on this aspect of the latest ESO report, Premier Panton explained, “The 2023 Q2(second quarter) inflation rate was 4.1 per cent, down from 6.6 per cent in Q1 (first quarter). This would seem to indicate a gradual levelling off in the inflation rate as we move through the year, with average inflation for 2023 projected at 5.2 per cent.”

He said it is expected that the impact of Central Bank actions and improvements in the international supply chain will help to temper these price pressures throughout the upcoming year.

However, Premier Panton noted that “Despite this slowdown in the pace of inflation, these increases remain well above the comfort levels for many Caymanians.”

He outlined steps being taken by his PACT coalition government to ease the burden on families. These he said include providing free school meals, removing import duties on essential products, increasing pension payments to retirees, and reducing fees for the elderly.

The Premier also said other ways his government is working to minimise the impact of inflation on the general population, involve an ongoing review of the national minimum wage and the work of the Inter-Ministerial Housing Task Force whose policy recommendations and options offer solutions to address issues surrounding the cost and availability of affordable housing.

“Inflation is falling but it is still too high,” Premier Panton declared. “While I will continue to do everything in my power as Premier to bring inflation down, I think most Caymanians will recognise and appreciate that inflation is a local challenge with global causes.”

He pointed to the July 2023 World Economic Update by the International Monetary Fund (IMF) which noted that inflation remains high globally and continues to erode the purchasing power of families and households in countries around the world.

“These burdensome, global inflationary pressures are a challenge for families and kitchen tables across the Islands. This Government will continue to do our best to mitigate and deal with the effects of inflation for Caymanians here at home,” Mr Panton added.

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