Inflation Rate Jumps to 3.4%
Bermuda consumer price inflation jumped 3.4 percent on a year-over-year basis in September, putting inflationary concerns firmly on the radar of newly-installed Premier and Finance Minister Paula Cox. This was the highest recorded rate since February, 2009 when inflation stood at 4.4 percent.
A report released by the Department of Statistics today said the inflationary upswing owed mainly to increases in the travel, health and rent sectors of the Consumer Price Index.
“The Transport & Vehicles sector was the largest contributor to the twelve-month increase in the Consumer Price Index,” reported the Department. “The average cost to travel overseas during the month of September increased 16.6 per cent. Residents paid more for hotel accommodations and airfare. As a result, the rate of price increase for this sector increased a strong 7.4 per cent. The Health & Personal Care and Rent sectors also impacted strongly on the annual rate of inflation, as price shifts in these sectors were 8.7 per cent and 1.6 per cent, respectively.”
Despite the jump Government and economists do not anticipate Bermuda’s inflation will spiral out of control — even if it remains high in the months ahead. Very slow growth while Bermuda’s economy edges out of its worst recession in more than 50 years gives firms little scope to raise prices and means workers are in a poor position to negotiate pay increases — both of which will put the brakes on the prospect of runaway inflation.
The Consumer Price Index (CPI) is a statistical tool used for measuring changes in the general level of prices of consumer goods and services purchased by private households. The index measures price movements of a given quality and quantity of goods and services. The mix of these consumer goods and services comprising the index, are figuratively thought of as a “shopping basket.” In constructing this “shopping basket”, the selected goods and services are organised first by commodity type. The Bermuda CPI is structured into nine expenditure groups or sectors: Food, Rent, Clothing & Footwear, Tobacco & Liquor, Fuel & Power, Transport & Vehicles, Household Goods, Services & Communications, Education, Recreation & Reading and Health & Personal Care
The full 4-page report is below:
