The Tribune

By FAY SIMMONS

Tribune Business Reporter

jsimmons@tribunemedia.net

THE trend for inflation has been hailed as "positive" by a campaigner for good governance.

The Bahamas National Statistical Institute (BNSI) released its Consumer Price Index (CPI) for June 2023 which determined the the monthly inflation rate, which represents the overall change in prices for 2023 increased by 0.1 percent when compared to May 2023. The increase in the inflation rate is show in the overall pice of items purchased during this period. The report went on to note that inflation rate increased by 0.4 percent from April 2023 to May 2023.

Hubert Edwards, head of the Organisation for Responsible Governance’s (ORG) economic development committee, told Tribune Business that the inflation rate trend is "positive", noting that the inflation rate in June 2022 was 6.2 percent and has halved by June 2023, settling at 3.1 percent. He noted that the inflation rate is consistent with the United States June inflation rate of 3 percent and that consumers may see prices trending down.

He said: “If you look at the trend since June, last year, we had inflation of 6.2 percent and it does come down, reasonably well, down to 3.1 percent. We move from 0.4 percent increase last month to a 0.1 percent increase and now settling at 3.1 percent overall for inflation. I think overall it's positive.

“From a macro perspective, the rates are down, they seem to be very consistent with what is happening in the United States. Their latest report, which came out for June, had inflation pegged at about 3 percent. So the Bahamas is kind of moving in tandem with the United States, at least at this point in time.

“Overall, this is really good news for consumers to have the possibility of experiencing price trending down.”

The BNSI report also revealed that transportation and food and non- alcoholic beverages increased while alcoholic beverages, tobacco and narcotic and miscellaneous goods and services decreased.

“Transportation and Food and Non-Alcoholic Beverages saw increases of 3 percent and 1 percent respectively, when compared to the previous month. Meanwhile, Alcoholic beverages, tobacco and Narcotics along with Miscellaneous Goods and Services recorded decreases of 0.9percent , and 2 percent for the month of June 2023. “ the BNSI report said.

Mr Edwards said that individuals that spend a large portion of their income on areas like food and transportation may not feel the overall reduction in inflation as these areas continue to increase.

He said: “The average individual who spends a larger portion of their income on food and transport is not necessarily going to have the same experience as an individual who has a greater proportion of their income going to non food and and non transportation item.

An increase in recreation and culture and alcoholic beverages was noted by the BNSI report as well as a decline in diesel and gasoline prices when compared to the same period in 2022.

It said: “On a year over year basis, the CPI rose 3% over the same period last year in 2022. The major categories that contributed to this rise included Recreation and Culture, along with Alcoholic Beverages, with increases of 21%, 10 % respectively.

“Diesel prices along with gasoline declined 23 percent and 15 percent respectively compared to this period in 2022. However, compared to May 2023, diesel prices decreased by -4.1 percent. Meanwhile, gasoline prices showed little to no change with an increase of 0.2 percent, for the month of June 2023.”

Mr Edwards said it was concerning that fuel costs have not decreased although the overall rate has and noted that fuel is an important part of production and transportation and we should be "cautious" of this development.

He said: “I also took a look at the impact on gas, gasoline, and we know that there's been little to no change in the cost of gasoline. So that would be one of the areas of a little bit of a worry for consumers given the fact that gasoline is such a ubiquitous input in a number of activities in impact transportation, it impacts businesses impacts pretty much everything that the consumer ultimately purchases. So we have to we have to be cautious about that. And the fact that it is not yet showing any trend downwards, but despite the fact that the overall rate is going down.”

Mr Edwards added that global influences such as the war in Ukraine and financial unsurety in countries like the United States and China, the Bahamas’ reduction in inflation rate over the past year is a ‘significant change’. He added that ‘vulnerable’ persons that spend the majority of their earnings on food, housing and transportation will still feel ‘a pinch’ but if the trend continues they will eventually find themselves in a better position.

He said: “This is positive, bearing in mind that the Bahamas is is always a net importer of inflation. And so when we take into consideration the significant drivers, the war in Ukraine still continuing, the unsettled economy in the United States, it is up and down even though they are seeing a very strong labor market, which suggests that there could He still be some pressure for increased inflation. So when you take all of these things into consideration, the fact that we are seeing a trending downward trend in our CPI index is always going to be a positive.

“We were coming from a peak of 7.1 percent in July 2022, it's now 3.1percent, so that is more than half over a year. That's a really, really significant change. So we are hoping that this represents an improvement in the overall state of affairs of the consumer. We have to recognize that there are certain categories where because the rate is not changing people are still going to feel a pinch, especially if they are if they are in vulnerable categories where they really spend most of whatever they earn on food, housing, and maybe transportation. They are still going to continue to feel the squeeze for a time being but we're hoping that this trends down more and those persons would be in a better state of affairs.”