Cayman: Inflation Rate slowed to 4.1 percent in Q2 2023
Grand Cayman, 14 October 2023 – The Cayman Islands’ 2023 second quarter inflation rate was 4.1 percent. The Consumer Price Index (CPI) for the second quarter was 130.4, with higher price indices recorded in 10 of the 12 divisions.
The leading contributors to the overall increase include a 10.7 percent rise in the Household Furnishings and Equipment category, along with a 7.0 percent rise in the Food and Non-alcoholic Beverages category.
There was upward movement of 6.0 percent in Housing & Utilities; Clothing & Footwear along with Miscellaneous Goods & Services featured increases of 4.7 and 4.3 percent, respectively. A 3.9 percent increase in Alcoholic Beverages reflects increases in the average prices for spirits, alcoholic cordials and wine.
A 6.0 percent increase in Housing and Utilities was primarily the result of the 15.3 percent rise in the index for Electricity. The index for water supply also increased by 10.0 percent. Furthermore, actual rentals paid by tenants rose by 9.0 percent, while materials for the maintenance and repair of dwellings featured an increase of 10.6 percent.
A comparison of Quarter-on-Quarter inflation (June 2023/March 2023) reveals that the Consumer Price Index (CPI) declined by 0.1 percent between the first and second quarters of 2023, with decreases of 1.0 percent in Food & Non-alcoholic Beverages, 1.0 percent in Restaurants & Hotels, 0.9 percent in Housing & Utilities, and 1.0 percent in Clothing & Footwear. Increases of 1.8 percent in Household Furnishings & Equipment, 1.7 percent in Education, and 1.5 percent in Recreation & Culture had a moderating effect on the quarter-on-quarter decline.
Noting the heavy impact of inflation on the cost of living in the Cayman Islands, Premier and Minister for Finance & Economic Development Hon. G. Wayne Panton said, “The residual effects of the pandemic and Russia’s invasion of Ukraine have contributed to prices rising more quickly than usual over the last few years. These price increases also have the effect of raising the cost of living across our islands, especially for the most vulnerable Caymanians. We know this is worrying for many people and families and this remains one of the top priorities for this Government. Indeed, tackling the cost of living is one of the challenges this administration grapples with each day. Every morning, we wake up seeking solutions that bring meaningful relief to the people of this country.”
The Premier explained, “The 2023 Q2 inflation rate was 4.1 percent, down from 6.6 percent in Q1. This would seem to indicate a gradual levelling off in the inflation rate as we move through the year, with average inflation for 2023 projected at 5.2%. It is expected that the impact of Central Bank actions and improvements in the international supply chain will help to temper these price pressures throughout the upcoming year.”
Premier Panton continued, “Despite this slowdown in the pace of inflation, these increases remain well above the comfort levels for many Caymanians. Government initiatives to decrease the cost-burden for families (including providing free school means for our children, removing import duties on essential products, increasing pension payments to retirees, and reducing fees for the elderly) will continue.”
The Premier also noted other ways Government works to minimise the impact of inflation on the general population, including an on-going review of the national minimum wage and the work of the Inter-Ministerial Housing Task Force whose policy recommendations and options offer solutions to address issues surrounding the cost and availability of affordable housing in the Cayman Islands.
Premier Panton said, “Inflation is falling but it is still too high. While I will continue to do everything in my power as Premier to bring inflation down, I think most Caymanians will recognise and appreciate that inflation is a local challenge with global causes. Indeed, in its July 2023 World Economic Update, the International Monetary Fund (IMF) noted that inflation remains high globally and continues to erode the purchasing power of families and households in countries around the world. These burdensome, global inflationary pressures are a challenge for families and kitchen tables across the Islands. This Government will continue to do our best to mitigate and deal with the effects of inflation for Caymanians here at home.”
The Cayman Islands’ Consumer Price Index Report: April to June 2023 is available at www.eso.ky