Amid ever-increasing concern over the rising cost of living, Government’s official data agency, the Central Statistical Office (CSO), this week reported that the prices of food and non-alcoholic beverages were 17.33 per cent higher in January 2023 than in January 2022.
The prices of food and non-alcoholic beverages were 17.32 per cent higher in December 2022 than in December 2021. The CSO report indicated that food and non-alcoholic beverage prices in January 2023 were 25.04 per cent higher than in January 2021.
In its latest report of the Retail Price Index (RPI), the CSO also noted that the cost of transportation in January 2023 was 14 per cent higher than a year earlier.
The increase in the cost of transportation mainly resulted from the decision by the Government to increase the price of fuels twice last year—on April 19, and in the September 26, 2022 budget presentation:
• Those price increases raised the cost of diesel by 29.32 per cent last year from $3.41 a litre to $4.41 a litre;
• The price of super gasoline rose by 40.24 per cent in 2022 from $4.97 per litre to $6.97 per litre;
• And the price of premium gasoline increased by 34.78 per cent, moving from $5.75 to $7.75 per litre. Fuel prices were raised because of the increase in the price of crude oil that followed Russia’s invasion of Ukraine.
Prices for recreation and culture were 11 per cent higher in January this year than last year and prices at hotels, cafes and restaurants were recorded as being 9.9 per cent higher for the first month of 2023 than 12 months earlier.
More moderate price increases were noted for alcoholic beverages and tobacco (up 0.3 per cent); communication (up 0.1 per cent) and clothing and footwear (up 0.9 per cent), according to the CSO.
No increase in prices was recorded for education and the category housing, water, electricity, gas and other fuels.
The CSO, which falls under the control of the Ministry of Planning and Development, reported that the All Items Index of prices in the economy was, on average, 8.32 per cent higher in January this year than January last year.
The January All Items Index of prices, which is described as the headline inflation rate, was marginally lower that the 8.73 per cent increase the CSO reported for December 2022.
The CSO’s publication of the January 2023 data on inflation comes as the Central Bank is due to make its quarterly Monetary Police Announcement today. In that report, the Cental Bank analyses the impact of various factors on the price of goods and the availability of credit in T&T and announces the repo rate, which influences interest rate throughout the economy.
In the March 16, 2023 concluding statement following its two-week long Article IV consultation, a team from the International Monetary Fund advised the Central Bank to that an increase in the repo rate should be “seriously considered."
The IMF team said: “The Central Bank of Trinidad and Tobago (CBTT) has maintained its repo rate at 3.5 percent since March 2020 to support the recovery of the economy. Increasing the policy rate should be seriously considered to contain inflationary pressures and narrow the negative interest rate differentials with the US monetary policy rate.”
Responding to that advice from IMF at a news conference on Monday, Finance Minister cited a comment he said was made Central Bank Governor Dr Alvin Hilaire during their discussions with the IMF team. Hilaire is reported to have said that “unlike the Federal Reserve in the US, which has a legal mandate to use interest rates to contain inflation, we have no such mandate in Trinidad and Tobago.”
The Central Bank's mandate is "the promotion of such monetary, credit and exchange policies as would foster monetary and financial stability and public confidence and be favourable to the economy of Trinidad and Tobago."
Focusing specifically on the change in food and non-alcoholic prices between the end of December 2022 and January 2023, the CSO said: “The Index for Food and Non-Alcoholic Beverages increased from 149.0 in December 2022 to 150.3 in January 2023, reflecting an increase of 0.9 per cent.
“Contributing significantly to this increase was the general upward movement in the prices of chilled or frozen beef, fresh beef, pumpkin, chilled or frozen pork, fresh carite, fresh whole chickens, hot peppers, pimentos, table margarine and evaporated milk.
“However, the full impact of these price increases was offset by the general decreases in the prices of cucumbers, celery, tomatoes, ochroes, lettuce, chives, other fresh goat, bodi, mixed fresh seasoning and patchoi.
“Price changes in this section for the month of January 2023 accounted for a net overall increase of 0.2 points in the All Items Index.”