THE CAYMAN ISLANDS CONSUMER PRICE INDEX REPORT: JUNE 2016 (Date of release: August 10, 2016)

Transcription

1 THE CAYMAN ISLANDS CONSUMER PRICE INDEX REPORT: JUNE 2016 (Date of release: August 10, 2016) CPI Falls by 0.8% in the Second Quarter of 2016 The overall Consumer Price Index (CPI) for the second quarter of 2016 was 100.3, lower by 0.8 percent when compared to the second quarter of A comparison with the previous quarter ending March 2016 indicates a decline of 1.0 percent. Figure 1: Inflation Rates (June 2012 June 2016) (% Change in CPI of Current Quarter over Same Quarter a Year Ago) Mar Jun Sept Dec Mar Jun Sept Dec Mar Jun Sept Dec Mar Jun Sept Dec Mar Jun Annual changes: June 2016 over June 2015 The overall 0.8 percent decline in June 2016 in comparison to June 2015 is mainly due to reduced prices of items in the following divisions: Housing and utilities: the price index registered a decline of 3.0 percent. Prices for electricity, gas and other fuels fell by 12.8 percent as a result of the decline in oil prices. Water supply and miscellaneous services declined by 10.6 percent. Imputed rentals for owner-occupied housing and actual rentals were lower by 1.6 percent.

2 Restaurants and hotels: the division s index fell by 1.0 percent as the accommodation services price index slid by 13.1 percent. However, there was a 0.6 percent rise in the price index for catering services. Food and non-alcoholic beverages: this index fell by 0.1 percent as the average cost of items in most components decreased, led by fruits; milk, cheese and egg. However, fish and seafood prices rose by 7.5 percent; coffee, tea, and cocoa went up 2.7 percent; and food products not elsewhere classified 0.7 percent. No price movements were recorded for vegetables. Meanwhile, the following divisions recorded increases in June 2016 compared to June 2015: Recreation and culture: this division rose by 1.9 percent, coming mainly from other recreational items and equipment, gardens and pets which went up by 7.6 percent; recreational and cultural services by 4.2 percent; and other major durables for recreation and culture by 1.5 percent. The movement in the division s index was moderated by declines in the index for audio-visual, photographic and information processing equipment which went down by 15.2 percent, and newspapers and stationery by 8.3 percent. Education: there was a 0.8 percent rise above the June 2015 price level due to increases in the average school fees for secondary up by 1.4 percent and pre-primary and primary education up by 1.1 percent. Tertiary education recorded no movement in its index for the period under review. Clothing and footwear: this division s index rose by 0.6 percent as footwear prices moved up by an average of 2.5 percent and clothing by 0.2 percent. Alcohol and tobacco: the index for this division moved upward by 0.3 percent as a result of a 0.5 percent rise in tobacco prices. On average, the prices for alcoholic beverages went up by 0.2 percent. Health: there was a 0.3 percent increase in this division s price index largely traced to both outpatient services and hospital services which recorded a 0.4 percent rise. There was a 0.1 percent decline in the index for medical products, appliances, and equipment. Miscellaneous goods and services: there was a 0.3 percent rise in the price index as personal effects not elsewhere classified (mainly jewellery) rose by 23.0 percent. Other services not elsewhere classified (such as legal services and funeral expenses) also rose by 4.7 percent, while personal care went up by 1.1 percent. The insurance price index went down by 3.0 percent. However, no price movements were recorded for social protection and financial services not elsewhere classified. 2

3 Communication: there was a 0.1 percent rise in the price index as all sub-groups except telephone and telefax equipment registered at higher levels. Postal services and telephone and telefax services rose by 0.1 percent reflecting the impact of an increase in call rates. Meanwhile, the index for the transport and household equipment divisions showed no movement over the previous year. For transport services, there was a 14.1 percent surge in the average cost of transport services (such as air fares) which offset the 7.7-percent decline in the cost of operation of personal transport equipment. Quarterly changes: June 2016 compared to March 2016 The following divisions were the main contributors to the 1.0 percent second quarter CPI decrease over the first quarter of 2016: Restaurants and hotels: this index fell by 3.2 percent. The main contributor to the decline was the 24.3 percent downward movement in the index for accommodation services. However, the index for catering services inched up marginally by 0.1 percent. Miscellaneous goods and services: this index, the second largest weighted group in the entire CPI basket, declined by 2.9 percent. Downward price movements were recorded for insurance by 4.3 percent; personal effects not elsewhere classified by 3.6 percent; personal care by 0.6 percent; and other services not elsewhere classified by 0.3 percent. Food and non-alcoholic beverages: the index had a downward movement of 1.5 percent for the quarter. The main contributors were fruits and vegetables of 5.9 and 5.6 percent, respectively. Meat and meat products also moved downward by 2.4 percent; coffee, tea and cocoa by 2.3 percent; milk, cheese, and egg by 1.5 percent; and mineral water, soft drinks, fruit and vegetable juices down by 1.2 percent. However, the index for fish and seafood rose by 5.3 percent and oils and fats up by 3.3 percent. Housing and utilities: this index, which accounts for almost 2/5 of the entire CPI basket, declined by 1.4 percent. Actual rentals and imputed rentals for owneroccupied housing recorded no movement. Other components had a quarterly downturn: electricity, gas and other fuels by 10.1 percent; and water supply and miscellaneous services by 5.7 percent. However, there was a 1.7 percent rise in the index for maintenance and repair of dwelling. The following divisions recorded notable upward movements in their indices when compared to the quarter ending June 2016: Recreation and culture: this division experienced a price increase of 2.6 percent which is traced primarily to other recreational items and equipment, gardens and pets that 3

4 moved up by 9.0 percent. However, there was a 1.1 percent decline in the index for audio-visual, photographic, and information processing equipment. Household equipment: the index moved upwards by 0.3 percent as all the components of this division recorded increased prices except household textiles. The index for tools and equipment for house and garden increased by 2.5 percent; and glassware, tableware and household utensils went up by 2.1 percent. Clothing and footwear: the division s index went up by 0.1 percent as footwear rose by 0.5 percent. Prices for clothing were stable. Meanwhile, the index for the alcohol and tobacco, health, transport, communication, and education divisions showed no movement over the previous quarter. 4

5 Table 1: Quarterly Consumer Price Index and Inflation Rates JUNE 2008 = 100 Year Quarter INDEX Percentage change in CPI: Ending 3 months ago 1 year ago 2009 March June September December March June September December March June September December March June September December March June September December March June September December March June September December March June

6 CAYMAN ISLANDS CONSUMER PRICE INDEX Table 2 ANNUAL AVERAGES 1995 TO 2015 (June 2008 = 100) YEAR INDEX Percentage change from a year ago

7 TABLE 3: CONSUMER PRICE INDICES AND INFLATION BY DIVISIONS AND GROUPS - SECOND QUARTER 2016 Major Group Index Percetage Change Weight June-16 Mar-16 June-15 3 months Ago 1 year ago All Divisions - All items 1, Food & Non Alcoholic Beverage Bread & cereals Meat & meat products Fish & seafood Milk, cheese & egg Oils & fats Fruits Vegetables Sugars, jam, honey, chocolate & confectionery Food products n.e.c Coffee, tea & cocoa Mineral water, soft drinks, fruit & vegetable juices Alcohol and Tobacco Alcohol Tobacco Clothing and Footwear Clothing Footwear Housing and Utilities Actual rentals for housing Imputed rentals for owner-occupied housing Maintenance and repair of dwelling Water supply and miscellaneous services Electricity, gas and other fuels Household Equipment Furniture and furnishings Household textiles Household appliances Glassware, tableware and household utensils Tools and equipment for house and garden Goods and services for routine household maintenance Health Medical products, appliances and equipment Outpatient services Hospital services Transport Purchase of vehicles Operations of personal transport equipment Transport services Communication Postal services Telephone & telefax equipment Telephone & telefax services Recreation and Culture Audio-visual, photographic and information processing equipment Other major durables for recreation and culture Other recreational items and equipment, gardens and pets Recreational & cultural services Newspapers, books and stationery Education Pre-primary and primary education Secondary education Tertiary education Restaurants and Hotels Catering Services Accomodation Sevices Miscellaneous Goods and Services Personal care Personal effects n.e.c Social protection Insurance Financial services n.e.c Other services n.e.c

8 CONSUMER PRICE REPORT JUNE 2016 Table 4: Consumer Price Index, Averages by Major Groups (JUNE 2008 = 100) PERIOD / DIVISION Food & Nonalcoholic beverages Alcoholic Beverages & Tobacco Clothing & Footwear Housing and Utilities Household Recreation & Equipment Health Transport Communication Culture Education Restaurants & Hotels Miscellaneous Goods & Services ALL ITEMS WEIGHT MARCH JUNE SEPTEMBER DECEMBER ANNUAL AVERAGE MARCH JUNE SEPTEMBER DECEMBER ANNUAL AVERAGE MARCH JUNE SEPTEMBER DECEMBER ANNUAL AVERAGE MARCH JUNE SEPTEMBER DECEMBER ANNUAL AVERAGE MARCH JUNE SEPTEMBER DECEMBER ANNUAL AVERAGE % CHANGE ANNUAL AVERAGE MARCH JUNE % CHANGE PREV YEAR % CHANGE PREV QTR

9 CONSUMER PRICE REPORT JUNE 2016 TABLE 5: AVERAGE PRICES OF SELECTED ITEMS Quarter Ending June 2016 Item Quantity Average Prices (CI$) June-15 Mar-16 June-16 Loaf - Harddough 2 lb Long Grain Rice 5 lb Cornflakes (original) 24 oz Stew Beef per lb Bacon 12 oz Snapper Fillets (frozen) per lb Canned Tuna in water 6 oz Eggs (Grade A Large) 1 doz Margarine -Shedds Spread 45 oz Fresh Milk (McArthur - Regular Vitamin D) 1 gal Evaporated milk (Nestle Carnation) 14 oz Vegetable Oil 24 oz Plantain per lb Potatoes - Irish per lb Lettuce - Iceburg each Sweet Potatoes per lb Tomatoes - Slicing per lb Bananas - Ripe per lb Apple - Golden Delicious per lb Grapes - Red Seedless per lb Tea (Lipton Decaffeinated) 48 bags Coffee - Instant -Classic Roast - Bottle 8 oz Soda 12 oz Sugar - Light Brown (Bag) 2 lb Corned Beef - regular 340 g Iodized Salt 26 oz Petrol - Regular Full Service per gal Petrol - Premium Full Service per gal Diesel - Full Service per gal

10 CONSUMER PRICE REPORT JUNE 2016 NOTES ON THE INDEX COMPILATION 1. Data collection This report uses the 2008 CPI basket based on the results of the 2007 Survey of Living Conditions/Household Budget Survey (HBS) as updated in June The goods and services in the basket are classified into twelve (12) divisions using the United Nations Classification of Individual Consumption According to Purpose (COICOP). In all, there are 1,393 items (7th-digit COICOP level) included in the basket collected from 147 providers/outlets in Grand Cayman, classified as follows: Number of Items in the 2008 CPI Basket Division 1 Food and non-alcoholic beverages 47 2 Alcoholic beverages and tobacco 5 3 Clothing and footwear 13 4 Housing, utilities and fuels 6 Furnishings, household equipment 5 and routine household maintenance Healt 4 7 Transport 7 8 Communication 4 9 Recreation and Culture 6 1 Education 1 1 Restaurants and hotels 13 1 Miscellaneous goods and services 9 Total 1,393 ESO also adopted new collection periods and price averaging methodologies in accordance with updated international standards and as advised by the Caribbean Technical Assistance Centre (CARTAC). Beginning in the fourth quarter of 2009, price data for all items are collected every second month of the quarter (whereas they were previously collected every third month). Prices of selected items that are vulnerable to monthly changes such as vegetables and fruits, fish and meat, and gas are now also collected on a monthly basis. Prices across outlets are averaged using the geometric mean formula to reduce the impact of extreme or outlier prices (please see below). 2. CPI formula The CPI is computed using Lowe s formula. The Lowe indices is one of the widest and popular class of price indices which is obtained by defining the index as the percentage change, between the periods 10

11 CONSUMER PRICE REPORT JUNE 2016 compared, in the total cost of purchasing a given set of quantities, generally described as a basket. 1 Lowe index, PLo, is defined as follows 2: The P Lo = n t p q i1 i i / p 0 i q i Where n = number of products in the basket with prices p i and quantities q i 0 = base period t = later period being compared Geometric mean The price p = [p1, p2,..., pn] for each item from different outlets is the average of prices of the outlets using geometric mean or the formula: p = n i1 p i 1/n = n p 1, p2,..., pn Inflation: this refers to the percentage change in the Consumer Price Index from one period to another. Typically, this period would be a year or a quarter. Annual Inflation Rate: the percentage change of the CPI in the quarter under review over the CPI of the same quarter a year ago. This is also known as year-on-year inflation rate. Quarterly Inflation Rate: the percentage change of the CPI in the quarter under review over the immediate previous quarter. This is also known as quarter-on-quarter inflation rate. 1 ILO (2004, p. 2). Consumer price index manual 2 Ibid, p.3 11