Inflation rises but trend declining
published: Friday | July 23, 2004

By Jason Morris, JMMB Analyst

JAMAICA'S INFLATION rate for the month of June was 0.8 per cent, compared with 0.6 per cent and 0.4 per cent for the months of May and April respectively. This clearly shows a rising trend in the monthly inflation rate. However, the 12-month inflation rate fell to 12.1 per cent in June, following 14.0 per cent and 15.4 per cent for May and April respectively, which clearly shows a declining trend in the annual rate of inflation. This is the lowest annual inflation rate since 11.9 per cent in August 2003.

WORST CASE SCENARIOS

As shown by stress testing three worst case scenarios in the last inflation report "'Thou Anointest My Head with Oil, but does my Cup Runneth Over?' June 16, 2004," we expect Jamaica's annual rate of inflation to fall throughout the entire calendar and fiscal years, even in the face of gradual rising monthly rates. We maintain our outlook that single digit inflation is likely to be achieved (all other things being equal of course), as the current inflation outturn is better than the lower end of our projected band for the end of the June quarter.