Consumer prices Sint Maarten December 2016.

Bi-monthly price index up slightly but annual inflation trending downwards The Consumer Price Index for Sint Maarten has increased in the month of December 2016 by 0.2 percent compared to that of October 2016.

When comparing average consumer prices over a twelve month period (Dec. 2015 to Dec. 2016), an increase of 0.1 percent was recorded compared to the same period one year earlier. Inflation has shown an overall decline in 2016 (0.1%) compared to the rate of inflation recorded in 2015 (0.3%). This is also notable in the major expenditure categories; ‘Food’, ‘Housing’ and ‘Transport & Communication’, which all continued to show low rates of inflation in 2016. Markedly, five of the nine expenditure categories which accounted for 77% of total expenditure, recorded deflation in December 2016, significantly impacting the lower annual inflation rate result in 2016.  This is evident from data released by the Department of Statistics (STAT) today.

Price changes between October & December 2016

The Consumer Price Index for Sint Maarten has increased in the month of December 2016 by 0.2 percent compared to that of October 2016. The price index recorded in December 2016 is 128.2.

Figure 1

Expenditure Categories – overall marginal increases recorded in consumer prices In December 2016, six of the nine expenditure categories have become marginally more expensive, whilst three recorded decreases. Amongst the more expensive were the categories; ‘Food’ (+0.2%), ‘Beverages and Tobacco’ (+0.1%), ‘Clothing and Footwear’ (+0.9%), ‘Housing’ (+0.3%), ‘Transport & Communication’ (+0.2%) and ‘Miscellaneous’ (+0.4%). Whereas the expenditure categories ‘Household Furnishing & Appliances’,

‘Medical care’ and ‘Recreation & Education’ recorded the following decreases; 0.3%,
1.1% and 1.0% respectively.

Within the expenditure category Food, it can be noted that only three of the nine food groups became less expensive, these were Meat and Fish (-0.6%), Pre-cooked dishes (-

0.6%) and Sugar & Chocolate (-0.4%). All other six food groups became more expensive.

More specifically the following products largely influenced the total price change within their food groups: ‘Grain’ was largely influenced by the products small breads n.e.c2 (+6.5%), Cereal (+6.4%) and Flour (+4.0%). The food group ‘Meat & Fish’, was largely influenced by oxtail (-4.4%), pork meat (-4.9%), pork chops with & without bone (-5.3%), Ham (-4.1%) and goat meat (+14.2%). The food group ‘Dairy Products’ was largely influenced by; powdered milk (-2.3%), Yoghurt and pudding (+21.9%) and eggs (-9.4%).

The food group ‘Potatoes, Vegetables & Fruit’ was largely influenced by; leafy greens (-
4.5%), cabbage (-9.8%), onions (-2.5%), tomatoes (-4.1%), bell peppers / paprika
(+8.5%), fresh vegetables n.e.c (-28.6%), spices (+2.4%), apples and pears (-4.5%), plantain (+10.6%) and other fresh fruit (+40.7%).

1 Please note that the pie chart above depicts the share (weight) each food group carries toward the entire Food expenditure category, whilst the percentages indicate the price change within that food group.
2 Not elsewhere classified

Housing

Within the expenditure category Housing, two of the five product groups became marginally more expensive whilst two remained stable and one became less expensive. The product group ‘Energy expenses’ declined by 0.1 percent while the groups ‘Maintenance of dwelling’ and ‘Dwelling costs’ increased by 1.0% and 0.4% respectively. An increase in the consumer price of electricity by 8.0% and a 30.8% decrease in consumer prices for cooking gas cylinders largely influenced the total price change within the product group ‘Energy expenses’. The product group ‘Maintenance of dwelling’ was largely influenced by the change recorded in the price of Paint (+5.7%) and wood (-3.5%).

TRANSPORTATION AND COMMUNICATION EXPENDITURE CATEGORY 20% of CPI

Within the expenditure category Transport & Communication, one of the four product groups became more expensive, whilst the others remained stable. Noteworthy is that the product group ‘Vehicle Expenses’ was largely influenced by the following products; Batteries (+2.9%), Car parts (-0.8%), Gasoline (+2.0%) and Diesel (+3.5%).

Sint Maarten Consumer Price Index a Broader Perspective

Consumer prices in the latter part 2016 were generally at a higher level than 3 years ago (see bar chart below), this is depicted in the upward sloping trend line. An increasing trend is shown, with consumer prices in December 2016 being 1.6 points above that of December 2014. However, it is noted that a period of declining consumer prices was observed during August 2015 to April 2016. This, however, was followed by a period of
steadily increasing consumer prices for the remaining part of 2016.

Sint Maarten Consumer Prices a closer look into the developments

The developments in overall consumer prices has shown a gradual increasing trend as depicted in the figure 5 above, yet over the past 3 year period has shown many fluctuations. In this section we will look at annual average prices and index levels on the product level within the three major expenditure categories namely; ‘Housing’ (39%),
‘Transport & Communication’ (20%) and ‘Food’ (10%).

In the ‘Food’ expenditure category the following products are being highlighted namely, white bread, wheat bread, flour, white rice, brown rice, corned beef, canned sausages, luncheon meat, sardines (in can), salmon (in can), tuna (in can), chicken, milk, baby formula, potatoes, tomatoes, root vegetables, dried beans & peas, apples and pears, grapes, prunes and oranges, coffee, tea, and sugar. The consumer price developments of these food products are depicted in figures 6 through 15 below.

Subsequently, in the ‘Transport & Communication’ expenditure category the following products are being highlighted namely, Diesel and Gasoline; price developments of these products are depicted in figures 16 through 19 below.

Followed by figures 19 and 20 which highlight consumer price developments for energy expenses (GEBE / electricity rates) which largely influence the expenditure category
‘Housing’. Most notable are the downward trend in consumer prices for petroleum related

The annual inflation recorded on Sint Maarten over the past 20 years has been extremely volatile; ranging from less than 1 percent in some years to over 4.5 percent in other years. Still noticeable is the continuous and consistently declining inflation recorded over the last
6-years. Notable is that the rate of inflation recorded in 2016 is the lowest over the last
20 year period.

3-year Overview

The trend line depicted on the bar chart below indicates that inflation on Sint Maarten over the prior 3-year period has been firmly declining. The rate of inflation contracted from 2.5 percent in December 2013 to 1.9 percent in December 2014 to 0.3 percent in December 2015 and now a mere 0.1 percent in December 2016. The recorded level of inflation started its descent since mid-2012 and has continued to fall steadily throughout 2015, followed by recorded levels of deflation throughout 2016. Yet the level of deflation gradually slowed down in the second half of 2016 ultimately resulting in an inflation result of 0.1 percent at year-end.

 Inflation Sint Maarten December 2016

The 12-month average of consumer prices was 0.1 percent higher in December 2016 than a year earlier. This represents a decrease in the inflation rate of approximately 67 percent within this period mentioned.

Inflation amongst the major Expenditure Categories

The annual inflation recorded amongst the major expenditure categories ‘Housing’ (39%),
‘Transport & Communication’ (20%) and ‘Food’ (10%) over the past 7-year period is depicted in the bar chart below. Noteworthy is that food inflation recorded much instability as opposed to the other major expenditure categories. Yet equally notable is the downward trending food inflation particularly in the last 4 years.

Striking also, is that both the expenditure categories ‘Housing’ and ‘Transport & Communication’ which accounts for 59 percent of household expenditure have recorded deflation in 2015 and 2016, which has ultimately affected the overall inflation level in these years.