Weekend Report | The Freeport News | PDF Online Guide

Monday, July 6, 2009

Home National Sports Business Lifestyles Religion Arts & Culture Pulse Spice Editorial letters Opinion Foodie Sportscope Real Talks Weekend Report PDF's Classifieds Contact About Us Archive Weather

Where's the beef... and other food inflation data By INDERIA SAUNDERS ~ Guardian Business Reporter ~ Inderia@nasguard.com The Central Bank is reporting what appears to be a pick up in disinflation during May, at the same time stopping short of providing its usual data on food prices — and without explanation. "Inflationary pressures continued to retreat from the mid-2008 peak, owing to lower average fuel costs," read the bank's latest monthly economic report for May. "As external price pressures eased, the annual domestic inflation rate decelerated to 1.8 percent in May from 4.9 percent in 2008." After months of high prices, the news may signal the country is indeed in the midst of disinflation — that the term economists use to describe an easing of inflation. The decline could, in fact, mean lower food prices for the nation, although the bank steered clear of mentioning where that key statistic now lies following its near 8-percent increase over the last year. A shift in inflation is usually considered to have a direct correlation on Bahamian food prices. However, the bank notes an ease in inflationary pressures had little influence in dropping prices for other necessities. Nevertheless, the 12-month average rate remained significantly higher at 4.6 percent, the bank reported citing accelerated price gains in excess of 5 percent during most of the latter half of 2008. "Of particular note were the energy cost related moderation in average price increases for housing [at] 0.1 percent and transportation [at] 0.7 percent," the report said. "Tempered advances for medical care and health [were recorded at] 1.6 percent and furniture and household operations [at] 0.8 percent." Conspicuously absent is that direct figure for food and beverage prices, something the bank usually publishes with its month economic report. Not surprising, it did note a decline in prices for recreation and entertainment services at 0.8 percent, likely the result of waning demand and the price drops associated with it. The decline comes as the country grapples with a 12 percent unemployment rate in New Providence and near 16 percent unemployment in Grand Bahama. Those readings are now months old, with the likelihood of further rises probable, say analysts. The worsening employment situation comes despite very recent gains in visitor arrivals to the nation, the majority of which are sailing in on cruises with an average $60 port spend. More importantly, the drop in overnight visitors has translated into mass job losses and the increasing number of Bahamians hard-pressed to meet their monthly bills. That's to say nothing about a pullback in discretionary spending. Added to that, the bank is reporting higher than average cost increases for education at 3.7 percent and clothing and footwear at 2.2 percent. Already, the nation already saw a 6 percent increase in enrollees for the public school sector starting in August 2008. There's strong indication that number will be added to this fall. The College of The Bahamas is also anticipating an increased number of students come next month given many simply are no longer able to afford tertiary education abroad. Monday, July 6, 2009