Point-to-Point Inflation Increases Despite Lower Monthly Consumer Prices

  • Point-to-point (P2P) inflation inched up to 5.3% in April, up 30 basis points from 5.0% in March. This marks the second consecutive P2P increase following February’s 4.4%.
  • The average price paid for goods and services by Jamaican consumers fell in April as seen by a 0.4% decline in the All-Jamaica Consumer Price Index (CPI). The largest contributor to the downward movement was a 1.4% decline in the index of the ‘Housing, Water, Electricity, Gas and Other Fuels’ division, influenced mainly by a 4.0% reduction in the index of the group ‘Electricity, Gas and Other Fuels’ as electricity rates fell.
  • A marginal reduction (-0.5%) in the heavily weighted index for the division ‘Food and Non-Alcoholic Beverages also contributed to the downward movement in April 2025. The slight falloff in the index was due to a 2.8% decline in prices for some agricultural produce as production continues to improve post-Beryl.
  • However, April’s outturn was tempered by a 0.4% increase in the index of the ‘Health’ division, primarily due to higher costs for prescription medication.
  • While it is higher than the 5.0% between March 2024 and March 2025, April’s monthly CPI reading continues to support the Bank of Jamaica’s (BOJ’s) expectations that inflation will remain anchored within its target range of 4%-6% over the next two years. Still, uncertainties surrounding the changing trade policies of our main trading partner could result in a less favourable outcome. These policies could result in higher inflation in the U.S. and higher imported inflation in the domestic market. However, the policies remain fluid, and the final level of tariffs is still unknown as negotiations continue between the U.S. and its trade partners.
  • At its last monetary policy meeting in March, the BOJ kept its policy rate at 6.00% as it continues to monitor the effects of U.S. trade policies on the local economy. The next policy decision will be on the 20th of May, when it is expected that BOJ will maintain its policy rate at 6.00%.

(Sources: STATIN and NCBCM Research)