Local Inflation Heating Up in May

  • The latest Data from the Statistical Institute of Jamaica (STATIN) show that consumer prices recorded the largest monthly increase since November 2025, when Hurricane Melissa’s impact on agricultural produce caused a 2.4% monthly surge in prices. The CPI rose by5% in May, contributing to the 5.4% 12-month point-to-point (P2P) inflation.
  • May’s monthly increase was driven primarily by a 1.9% rise in the index for the ‘Food and Non-Alcoholic Beverages’ division. This movement was largely attributable to higher prices for agricultural produce, including tomatoes, cabbage, carrots, ripe bananas and pineapples, which resulted in a 4.8% increase in the index of the class ‘Vegetables, tubers, plantains, cooking bananas and pulses’.
  • Also contributing to the increase was the ‘Restaurants and Accommodation Services’ division, recording a 5.7% rise in its index. STATIN noted this reflected higher prices for some meals consumed away from home. The monthly increases contributed to P2P increases of 8.7% for the ‘Food and Non-Alcoholic Beverages’ division, 6.9% for ‘Restaurant and Accommodation Services’ and 3.1% for Transport.
  • Notably, P2P and monthly contributions from ‘Housing, Water, Electricity, Gas and Other Fuels’ had one of the smallest monthly increases, up 0.7%. While there was a 2.9% increase in the price of electricity and gas and other fuels, it was tempered by a 1.8% increase in the cost of Housing and Water Supply. More relief may be incoming, with expectations of a formal signing of the U.S.-Iran peace agreement on June 19th and the subsequent reopening of the Strait of Hormuz. This could support a gradual normalisation of energy costs, as crude oil prices trend downwards.
  • While the reduction in fuel prices should provide some relief from rising costs, inflationary risks remain. The government recently approved a 16% fare increase for all Public Passenger Vehicle (PPV) operators, to be implemented over June and July. This adjustment is expected to be a key driver of inflation over the next 12 months. For context, a 19% increase in PPV fares in 2023 resulted in an average 10% rise in the Transport division of the CPI, with the effects persisting for roughly one year. Given this relationship, we expect the latest fare increase to have a similar impact, exerting upward pressure on transportation costs and contributing to higher overall price levels.

(Source: STATIN & NCBCM Research)