- Local Consumer prices rose 0.8% in September, according to the Statistical Institute of Jamaica (STATIN). This upward movement was primarily driven by the ‘Food and Non-Alcoholic Beverages’ (+0.9%), ‘Housing, Water, Electricity, Gas and Other Fuels’ (+1.0%), and ‘Education’ (+5.6%) divisions.
- The outturn in the Food division was influenced mainly by higher prices for some agricultural produce in the class ‘Vegetables, tubers, plantains, cooking bananas, and pulses’. Higher housing, water and fuel prices reflected increased electricity rates and rental costs, while education costs rose on the back of higher tuition fees for private schools at the primary level for the new school term.
- Despite the month-on-month increase, the point-to-point (P2P) inflation rate remains below the Bank of Jamaica’s (BOJ’s) target range (4.0-6.0%). The 12-month point-to-point (P2P) was 2.1%, influenced primarily by increases in ‘Housing, Water, Electricity, Gas and Other Fuels’ (+4.8%), ‘Restaurant and Accommodation Services’ (+4.1%) and ‘Food and Non-Alcoholic Beverages’ (+0.7%). The division ‘Information and Communication’ (-5.8%) moderated the growth in P2P.
- Despite broad market expectations for a reduction in the benchmark rate, the BOJ’s Monetary Policy Committee (MPC) unanimously voted to leave its policy rate at 5.75% against the background of low headline inflation amid global uncertainties at its meetings on September 25th and 26th.
- At that time, the BoJ emphasised that the forces driving historically low headline inflation were temporary, arising largely from strong base effects and policy changes. It also indicated that it will increasingly monitor core inflation, a less volatile indicator that has remained within the BoJ’s target since April 2023, as a key input into its monetary policy decisions. The next policy announcement is set for November 20, 2025, and Fitch Solutions maintains the view that the BOJ will reduce rates in Q4 2025.
(Sources: STATIN and BMI, A Fitch Solutions Company)