Inflation Report: May 2024 Shows Mixed Economic Signal

In May 2024, the All Items Index experienced a 6.6% increase over the past twelve months, maintaining a similar trend to April’s inflation rate. This rise was primarily influenced by significant increases in several key sectors:

1. Miscellaneous Goods and Services: +24.3%
2. Communication: +17.4%
3. Housing, Water, Electricity, Gas and Other Fuels: +5.5%
4. Food and Non-Alcoholic Beverages: +4.9%

These four groups collectively accounted for 90.6% of the overall All Items Index increase, with Miscellaneous Goods and Services alone contributing to one-third of the total 12-month rise.

Food and Non-Alcoholic Beverages Sector

The Food and Non-Alcoholic Beverages index saw a 4.9% increase, driven by a 4.5% rise in the Food Index. All nine food sub-categories experienced growth, with notable increases in:

• Milk, Cheese, and Eggs: +16.2% (accounting for 30.5% of Food inflation)
• Preserved Milk and other Milk Products: +25.9%
• Bread and Cereals: +5.1%
• Meat and Meat Products: +4.6%
• Vegetables: +2.3%

Core Inflation and Other Sectors

Core inflation, measured by the All Items Less Food and Energy index, rose by 7.6% over the last twelve months, surpassing the increase observed in the 12 months ending April 2024. Other significant increases included:

• Restaurants and Hotels: +12.9%
• Rent: +8.72%

Monthly Changes: May 2024 vs. April 2024

Contrary to the annual trend, the monthly Consumer Price Index declined by 1.2% in May 2024, following a 5.1% increase in April. This decline was primarily attributed to:

• Transport index: -9.7%
• Transport Services index: -23.3% (due to lower airline ticket prices to St. Maarten, Barbados, and New York)
• Food and Non-Alcoholic Beverages index: -1.8%
• Food index: -1.9%

The food category showed mixed results, with four out of nine sub-categories decreasing over the month:

• Vegetables: -5.8%
• Bread and Cereals: -4.1%
• Fish and Seafood: -4.1%

However, some food sub-categories saw increases:

• Sugars, Jams, Honey Chocolate, and Confectionery: +2.1%
• Fruits: +1.8%
• Meats and Meat Products: +0.8%

It’s worth noting that the index for All Items Less Food and Energy remained unchanged in May, indicating stability in core inflation on a month-to-month basis.

This report highlights the complex nature of inflation, with annual increases in most sectors but monthly declines in key areas such as transport and food, suggesting potential shifts in economic pressures.