April 2008 Report - Central Bank of Trinidad and Tobago

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CENTRAL BANK OF TRINIDAD AND TOBAGO MONETARY POLICY REPORT APRIL 2008 - 3 - MOVEMENT OF SELECTED CATEGORIES OF THE INDEX OF RETAIL PRICES /Percentage Change/ Monthly Year-on-Year October 2007 November 2007 October 2007 November 2007 Headline Inflation 0.9 1.2 7.3 8.1 Food Prices 2.4 3.4 16.5 18.7 Bread and Cereals 0.3 1.1 8.3 8.8 Meat 3.0 2.5 15.6 13.4 Fish 3.1 2.8 19.9 18.1 Vegetables 5.3 3.6 19.9 24.6 Fruits (0.9) 6.5 30.0 36.3 Milk, Cheese & Eggs 3.4 4.3 22.2 26.2 Oils and Fats 0.9 0.3 5.9 4.5 Sugar, Jam, Confectionery, etc. 0.1 1.4 5.6 6.4 Core Inflation 0.3 0.2 3.7 3.9 Alcoholic Beverages & Tobacco 2.7 6.4 7.3 12.1 Clothing and Footwear 0.6 0.1 3.3 3.9 Health 0.7 0.3 3.8 4.9 Rent 1.4 0.0 5.4 5.4 Home Ownership 1.2 0.0 4.1 4.1 Education 12.2 0.0 14.0 14.0 Recreation & Culture (8.0) 0.0 (1.0) (1.0) Hotels, Cafes & Restaurants 7.8 0.0 14.4 14.4 Transport 0.0 0.0 3.2 3.2 Source: Central Statistical Office. - End - Page 56
CENTRAL BANK OF TRINIDAD AND TOBAGO MONETARY POLICY REPORT APRIL 2008 POST OFFICE BOX 1250 PORT-OF-SPAIN, TRINIDAD, WEST INDIES TELE: 625-4835, FAX: (868) 623-1955 E-Mail Address: info@central-bank.org.tt Media Release CENTRAL BANK MAINTAINS ‘REPO’ RATE AT 8.0 PER CENT The final inflation figures for 2007, released by the Central Statistical Office, indicate that headline inflation slowed to 7.6 per cent in the twelve months to December 2007 from 9.1 per cent in December 2006 and a high of 10.0 per cent in October 2006. Food price inflation slowed to 16.8 per cent on a year-on-year basis in 2007, from 22.0 per cent in December 2006 and from 26.5 per cent in October 2006. Core Inflation, which filters out the effect of food prices, slowed to 3.9 per cent in 2007 from 4.6 per cent in 2006. The decline in inflation in 2007 fell somewhat short of the official 7 per cent target. However, in light of the unanticipated exogenous influences – most notably the significant global increase in food prices, the depreciation of the US dollar and the unprecedented rise in international energy prices – the reduction achieved represents considerable progress. The decline in food prices in 2007 is largely attributable to the broadening of the agricultural distribution network which has created more of a direct link between farmers and consumers. This contributed to greater price awareness and facilitated comparison shopping among consumers. This decline notwithstanding, the level of food prices in Trinidad and Tobago continues to be a cause for concern and underscores the urgent need for a major expansion in domestic agricultural production. The Government has recently outlined a programme to boost production in the agricultural sector while CARICOM countries are also discussing a regional approach to counter rising food prices. During 2007, fiscal injections continued to be very strong. The non-energy fiscal deficit remained at around 15 per cent of GDP for the second consecutive year compared with 11 per cent in fiscal 2005. Notwithstanding an increase in interest rates, private sector credit by the consolidated financial system continued to increase at a brisk pace facilitated by strong growth in consumer credit. /...2 Page 57
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April 2008 Report - Central Bank of Trinidad and Tobago

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