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Consumer Price Index may be outdated – BOJ Governor

The official consumer price index (CPI) managed by the Statistical Institute of Jamaica (STATIN) has reported its findings on prices facing consumers.

Bank of Jamaica Governor, Richard Byles (Photo: Shaquille Brooks)

Yet, Richard Byles, Governor of the Bank of Jamaica acknowledges that the component of the basket of goods and services tracked by the CPI may be outdated given that it the most recent update was in 2004.

That said, Byles noted that a new CPI will be introduced in April of 2020.

“However, before you dismiss the current basket, you must acknowledge that while it may not reflect your particular lifestyle, it is designed to show an average.”

– Bank of Jamaica Governor, Richard Byles

“All of Jamaica has a deep interest in the CPI. And we acknowledge that it is an issue. It was developed in 2004 or 2005. However, before you dismiss the current basket, you must acknowledge that while it may not reflect your particular lifestyle, it is designed to show an average. And that average includes Jamaicans in this room at the BOJ and Jamaicans in the rural parts of the country. And that means consumptive patterns vary and that it why it may seem like it doesn’t fit.”

The Bank of Jamaica in downtown Kingston, Jamaica (Photo: Jamaica Observer)

Backed by the latest research by STATIN, Byles stated “prices faced by consumers in Jamaica rose by 3.3 per cent for the year leading up to October 2019 versus 4.7 per cent for the same period last year.  The largest contributor to the inflation rate was food and non-alcoholic beverages which rose by 5.9 per cent over the year.  This was driven by an increase of close to 17 per cent in vegetable prices. Education also increased by 6.4 per cent which reflected increases in school fees.

However, the category of housing, water, electricity and gas, fell by 1.0 percent over the year. Rental rates and property repairs also fell in this category.

Governor of the Bank of Jamaica, Richard Byles

“This was driven by a decline in electricity rates due to a fall in the cost of the fuel used in electricity generation. Also, transport related expenses fell by 1.9 percent, also related to lower oil prices,” Byles said.