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Inflation rate increases by 1.2% in 2016
Data provided by the Guyana Bureau of Statistics
The Urban Consumer Price Index increased by 1.2 per cent between the period of December 2015 and November 2016. According to an economic bulletin produced by the Ministry of Finance, the major driver behind the inflation rate of 1.2 per cent for last year has been rising food prices.
The report said that prices between October and November 2016 had remained stable with a marginal increase in the prices for food and housing. As it relates to food, the items which experienced an increase in price were fruits, vegetables, pulse and pulse products and spices.
As of October 2016 the inflation rate was 1.1 per cent and was projected to be 1.3 per cent at the end of the year. However, on the issue of Monetary Policy and Inflation, in his 2017 budget speech, Minister of Finance Winston Jordan had said that the level of consumer price inflation is targeted to be 2.5 per cent in 2017.
He said that this would be a reflection of steady economic growth and a Bank of Guyana policy of moderate growth in money supply. According to Jordan, this subdued inflation will help to support the real purchasing power of households.
Jordan had said that monetary aggregates of broad money were expected to grow by 3.8 per cent during 2016 which would reflect a moderate real Gross Domestic Product growth and low inflation.
According to him, based on a macroeconomic analysis, government has enacted policies to support to support continuing stability in each of these areas, including positive growth, sustainable public debt, a narrowing trade deficit and low interest rates in the context of low inflation.
Based on information provided by the Finance Ministry as of January 2015, the inflation rate had begun increasing and had dropped significantly in March 2016. However, in May last year, the inflation rate begun to sharply rise finishing at 1.2 per cent at the end of the year.
These statistics presented by the Ministry of Finance were obtained from the Bureau of Statistics which calculates the Consumer Price Index by using prices collected from the urban centres of Guyana.
In doing this, the Bureau employs the concept of a commodity basket. The items which are included in the basket are selected from a household budget survey done in 2005 which produced a list of 217 items including goods and services commonly used by Guyanese.
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