Central bank: Higher inflation rate could persist over near term
As Bahamian consumers continue to experience a pinch in their pockets following last year’s increase in value-added tax (VAT), the Central Bank of The Bahamas (CBOB) is projecting an inflation hike could persist over the near term, impacting consumer prices.
Domestic inflation rose by 1.2 percentage points to 2.6 percent up to February, due largely in part to higher international oil prices, as well as the pass-through effects of the hike in the VAT rate, according to the CBOB Monthly Economic and Financial Developments (MEFD) report for April.
“Domestic inflation is expected to remain relatively subdued; however, a modestly higher rate could persist over the near term, reflecting the pass-through effects from the hike in the VAT rate and the rise in global oil prices,” the report notes.
Bahamians are feeling the pinch in particular when paying for transportation, food and non-alcoholic beverages, health services, restaurants & hotels and alcoholic beverages, tobacco & narcotics.
This increase followed a dip in the All Bahamas Retail Price Index at the end of 2018, which settled at 105.98 in December and shot back up to 108.07 in February 2019.
“Also of note were average price rises for furnishing & household equipment and clothing & footwear, compared to declines in the previous period; and continued but smaller increases for housing, water, gas and electricity and recreation & culture. In contrast, average prices declined for the communications and education components of the index,” the April MEFD states.
“Domestic energy costs rose during April, with the average price of gasoline firming by 7.2 percent over the previous month, and by 8.7 percent vis-à-vis 2018 to $4.75 per gallon. Similarly, diesel prices were higher by 1.9 percent month-on-month at $4.35 per gallon, but were 3.8 percent lower when compared to the prior year.”
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