CPI Falls Modestly for January 2026

  • The All-Jamaica Consumer Price Index (CPI) for January 2026 decreased by 0.8%, according to data released by the Statistical Institute of Jamaica (STATIN). This contrasts with November and December readings following Hurricane Melissa, where the CPI rose by 2.4% and 1.3%, respectively.
  • The main contributor to the decline in the CPI for January 2026 was the ‘Food and Non-Alcoholic Beverages’ division, which fell by 2.4%. A 9.9% fall in the index for the class, ‘Vegetables, tubers, plantains, cooking bananas, and pulses’ and an 8.4% decline in the index of the ‘Ready-made food products’ class were the main drivers. These declines were attributable to lower prices of some agricultural produce, including cabbage, carrots, cucumbers, escallion, sweet peppers and tomatoes. Supplies of these key short-duration crops rebounded in January, likely reflecting in part the efforts by the Ministry of Agriculture to get farming restarted quickly in the aftermath of Melissa through the distribution of seeds, fertilisers, etc.
  • Still, the movement in the CPI was moderated by a 0.7% increase in the index for the ‘Housing, Water, Electricity, Gas and Other Fuels’ division. This was due to higher water supply and sewage rates, given the previous disruptions to infrastructure-intensive sectors such as electricity, water supply and waste management, caused by Hurricane Melissa. Additionally, the index of the ‘Education’ division rose by 1.0% due to increased preparatory school fees.
  • The annual Point to Point (P2P) inflation rate also fell 0.6 percentage points to 3.9%, for the December 2024 to December 2025 period. As with the monthly figure, the slowdown featured a cooling of the ‘Food and Non-Alcoholic Beverages' class from 7.1% to 5.7%. On the other hand The ‘Housing, Water, Electricity, Gas and Other Fuels’ increased from (3.5% to 4.6%).
  • While it’s still too early to call, the inflation decline seems to defy expectations of a rise in 2026, fuelled by higher electricity costs to cover reconstruction of the grid and demand pressures for construction and related materials to facilitate reconstruction efforts.
  • In its December 2025 Quarterly Monetary Policy Report, the Bank of Jamaica (BOJ) projected average inflation of 7.4% over the period from December 2025 to September 2027. Core inflation was also expected to rise, exceeding the target range by mid-2026. However, given the unexpected decline in January’s reading amid lower food prices and the fact that the December spike stemmed from a supply-side shock, the inflationary impact of Hurricane Melissa could prove to be more temporary than previously anticipated. As such, the BOJ could revise its inflation outlook at its next Monetary Policy Meeting set for February 23, 2026. Nevertheless, expectations are for the BOJ to maintain its current policy rate at 5.75%.

(Sources: STATIN and NCBCM Research)