PIOJ Growth-Inducement Strategy - Planning Institute of Jamaica

$4,742.0 million and $688.4 million below expectations, respectively. The lower than
planned spending on interest reflected the impact of lower than projected interest rates
due to the Jamaica Debt Exchange.
Inflation
For 2010, the point to point inflation rate 14 was 11.7 per cent, 1.5 percentage points
greater than the rate recorded for 2009 15 (Table 5). During the year, prices were
influenced by both external and domestic forces.
Movements in international commodity prices, particularly crude oil and grains,
contributed to higher energy, food and transport-related prices. Consequently, the
divisions which contributed most to the inflation out-turn for the year were Food & Non-
Alcoholic Beverages, Transport, Housing, Water, Electricity, Gas & Other Fuels, which
together accounted for approximately 78.0 per cent of overall inflation.
Food & Non-Alcoholic Beverages increased by 12.8 per cent, influenced by
weather related shocks and upward movement in international grain prices.
Consequently, foods such as meat, bread and cereals for which grains are an input
recorded increased prices. Additionally, the supply of domestically produced
agricultural items was affected by drought conditions earlier in the year and by
heavy rains in the latter half. As a result, increases in the prices of Vegetables &
Starchy Foods accounted for approximately 40.0 per cent of the movement in
food prices.
Transport increased by 25.7 per cent. In addition to the effect of crude oil prices,
the upward movement of the Transport index was affected by the April 1st
increase granted to the JUTC and JUTC franchise operators.
Housing, Water, Electricity, Gas & Other Fuels increased by 8.4 per cent.
Movements in international commodity prices, particularly crude oil contributed
to higher energy costs. The West Texas Intermediate to which local energy prices
are linked, increased by approximately 28.8 per cent, translating into higher
electricity costs.
Higher consumer price indices were reflected in all three regions: Greater Kingston
Metropolitan Area (13.6 per cent); Other Urban Centres (12.0 per cent); and Rural Areas
(10.3 per cent).
14 This is the percentage change between the monthly index for December 2008 and the monthly index for
December 2007.
15 The average annual inflation rate was 12.6 per cent relative to 9.6 per cent for the preceding year.
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