THE downward trend in the overall price level which was noted in November last year continued in the month of December, where the Urban (Georgetown) Consumer Price Index (CPI) registered a further decline of 0.4% for the month of December, 2003.
According to a statement from the Bureau of Statistics, which examined the CPI for December 2003, the index value which stood at 185.0 in the month of November declined to 184.3 for the month of December.
Accordingly, a 0.5% annual inflation rate has been recorded when the index of December 2002 is compared with the index at December 2003.
The Bureau of Statistics contended that though December is the peak month for buying and selling during the festive season of Christmas, the fall in price levels during December were undoubtedly influenced by a number of factors.
Firstly, it said food prices registered a 1.2% decline, and with the food group being the highest weighted category in the basket of goods and services, its impact on the overall downward price trend was significant.
The Bureau also said substantial price decreases were recorded in the sub-categories of Vegetables and Vegetable Products (-13.7%). Fruits and Fruit Products (-2.7%) - while Cereal and Cereal products declined marginally by -0.2%. Though increases were recorded in the sub-categories of Meat, Fish and Eggs (2.7%), Condiments and Spices (2.4%), Alchoholic Beverages (2.0%) and Oils and Fats (1.0%), these did not reverse the overall downward price movement in prices for the Food Group.
The second factor to note in the decline of price levels for December was the high level of competition among vendors of both food and other consumer items. The Christmas season was noted for the special offers and bargains put out by the scores of competing vendors and this competition in no little way exerted first a stabilizing and then downward pull in prices in the weeks leading up to Christmas.
The third factor is that the pay out of salary increases came for the most after the December 15 and this caused a partial dampening of demand during the early part of the month of December.
Moreover, the seasonal trend of increased purchases in some consumer items which are noted for the traditional increased demand at Christmas were reflected in price increases in Building Materials (0.4%), Domestic Gas (1.3%). Restaurant Services (0.8%), Footwear and Repairs (0.3%), Housing (0.2%) and Transport and Communication (0.1%).
These price increases, however, did not reverse or alter the downward prices pressures exerted by the food group, which led to the overall decline of 0.4% in the prices for the month of December. (Mark Ramotar)