Cayman’s fuel issue skews inflation rate
(CNS Business): The Consumer Price Index (CPI) in Cayman fell by 2.8% during the first quarter of 2016 compared to the same time last year. The apparent deflation in the domestic economy is not necessarily a sign of an impending recession but as a result of a fall in oil prices and a reflection of how much the cost of oil skews the measurement of the country’s economic fortunes. The Economics and Statistics Office (ESO) revealed that lower fuel prices pushed down the average charges for water and related services as well as electricity, gas and other fuels and transport services but it also has a knock-on impact on the prices of many other goods.
The price index for housing and utilities registered a fall of 8.8%. Charges for water supply and miscellaneous services recorded a 14.8% negative adjustment, while the index for electricity, gas and other fuels fell by 12.4% following the trend in international oil prices.
“This is the fifth consecutive quarter of deflation since the first quarter of 2015, resulting largely from the continued reduction in fuel prices and import duty reductions on diesel used by Caribbean Utilities Company,” said Marco Archer, the Minister for Finance and Economic Development.
Despite the fall in the CPI, some things increased in price significantly; Cayman residents were paying more at the start of this year than last for some miscellaneous goods and services by 1.9%. Food and drink, shoes and clothes were costing shoppers more and they were also parting with more cash for health care and insurance. Users were also paying more for communication services, with the CPI recording a 2.3% rise.
