After months of silence, the Bureau of Statistics yesterday revealed data on the Consumer Price Index (CPI) which showed inflation at 4.8 per cent for the first quarter this year.
Food prices increased 8.4 percent for the first quarter of the year following an overall inflation of 14 per cent for last year, the Bureau said.
Chief Statistician at the Bureau, Lennox Benjamin in a press release said that prices of vegetables and vegetable products increased by 20.6 per cent, sugar, honey and related products by 18.3 per cent, cereals and cereal products by 11.7 per cent, pulses and pulse products by 11 per cent, and fruits and fruit products by 10.8 per cent among the main sub-categories.
The release said that adverse weather conditions affected both the rice and sugar industries with production in both showing a relative decline in comparison to the first quarter of 2007, thereby affecting the availability of supply on the local market during the first quarter of 2008, with the consequential effects on the level of prices.
In the non-food sub-categories, fuel and power charges increased by 8.6 per cent, purchased transport services by 3.2 per cent and hospital and related care services by 5.1 per cent.
The release said that it has been observed within the first quarter however that generally the public out of necessity has made adjustments to their expenditure portfolios and that apart from those increases mentioned in the services categories, consumer demand has slackened. It said that with the slackening came a lowering of prices in several non-food and lower priority categories, resulting in declines in the index of such sub-categories like clothing, by – 0.6 per cent (including clothing materials by – 2.7 per cent, furniture by – 2.0 per cent, household services by – 9.6 per cent, education, recreation and cultural services by – 0.5 per cent and footwear and repairs by – 4.3 per cent.
Benjamin said that the inflation rate for the second quarter of this year is likely to give a clearer picture of where the overall inflation for the year is heading.
Absence
Explaining the absence over almost a year of the CPI, he said that the monthly bulletins were not released since the last months of 2007 coincided with a wrap- up of the national economy which had been subsequently assessed by the Minister of Finance during the National Budget. The Minister had announced that there had been an inflation rate of 14 per cent for 2007.
Benjamin said that in December, information for the latter part of the year was made available on the Bureau’s website. Benjamin said that the Bureau from a policy perspective will be doing an overall review of the macro-economic performance of the economy.
He said that the Bureau took prices from the market and found that the prices of some commodities had been on the decrease. He said that milk was one such high- profile commodity following this trend.
But he said in the first quarter of this year the prices of food were still generally moving upward, through not as at rapid a pace as during the second half of last year.
He said that incomes haven’t grown to match the high prices and there is likely to be a levelling off when a platform is reached at which consumers would not be able to make purchase, or may change their consumption habits.
Benjamin said that the price of fuel is also impacting heavily on the inflation rate and the consumers at the end of the chain will feel the impact of this the most, since they will have to absorb these prices.
The Bureau in its report yesterday said that the compounded effects of both domestic and external factors contributed to an inflation rate of 14 per cent during 2007. “These factors were analysed in detail during 2007 and adequately summarised during the Budget presentation in 2008. The impact of external factors (import price escalations in both food and fuel imports) have continued unabated into 2008, and small open economies like Guyana have to bear the full brunt of this reality.
The press release said that the overall inflation rate of 14 per cent in 2007 was primarily fuelled by the increase in food prices of 20.6 per cent. In fact except for Pulses and Pulse products, there were double digit increases in the indices of all other 12 sub-categories in the food basket.
The release said that little has changed during the first quarter in the global series of events which have impacted so directly on the level of inflation in Guyana. “In fact, food prices have escalated even further in several countries of the world, and the price of crude oil and imported fuel prices have hit record highs.
Guyana accordingly has not been spared from these influences,” Benjamin said in the release.
He said too that the developments in the price movements in these and other key inputs will be monitored, both in terms of their declared import prices by importers as well as their final retail prices.
