JN Fund Managers’ Daily Market Update -February 18, 2020

Jamaica’s Inflation Rate Decreased by 1.1% in January 2020

According to STATIN, Jamaica’s inflation rate declined month over month by 1.1% in January 2020. The downward movement was due to declines in the divisions ‘Food & Non-Alcoholic Beverages’ (down 1.4%), ‘Housing, Water, Gas, Electricity and Other Fuels’ (down 4.0%) and ‘Transport’ (down 0.7%). The heavily weighted ‘Food & Non-Alcoholic Beverages’ division was impacted by lower prices for agricultural produce which lead to a decline of 4.9% in the class ‘Vegetables and Starchy Foods’. The decline in ‘Housing, Water, Electricity, Gas and Other Fuels’ division was largely a result of a 9.1% decline in the sub-category ‘Electricity, Gas and Other Fuels’. Jamaica’s point to point inflation was 5.2% while fiscal year to date was 4.3%.

We believe the January inflation outturn reflects that prices have somewhat normalized following the Christmas period when there was upward pressure on prices. However, considering the current dry weather conditions being experienced in sections of the island, it is likely that point to point inflation will trend towards the higher end of the Bank of Jamaica’s 4% to 6% target range.

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