Last December the Urban (Georgetown) Consumer Price Index (CPI) registered a further decline of 0.4%, continuing the downward trend in the overall price level which was noted in November, the Bureau of Statistics says.

The index value which stood at 185.0 in November declined to 184.3 in December, and accordingly a 5.0% annual inflation rate has been recorded when the index of December 2002 is compared with the index at December 2003.

Although December is the peak month for buying and selling owing to the festive Christmas season, the fall in price levels during this month was undoubtedly influenced by a number of factors, according to a press release from the bureau.

"Firstly, 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 notes.

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%.

However, while increases were recorded in the sub-categories of meat, fish and eggs (2.7%), condiments and spices (2.4%), alcoholic 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 bureau observes also that "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 stabilising and then a downward pull in prices in the weeks leading up to the Christmas."

And the third factor, according to the bureau, is that the "pay out of salary increases came for the most part after the 15th December and this caused a partial dampening of demand during the early part of the month."

But the seasonal trend of increased purchases in some consumer items, 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, the bureau points out, did not reverse or alter the downward price pressures exerted by the food group, which led to the overall decline of 0.4% in prices for December.