Cayman faces inflation despite economic slump

| 07/08/2011

(CNS): Although most business are still feeling the pinch of the economic recession, Cayman has also been hit with a surge in prices and the highest inflation rate since 2008. According to the Economics and Statistics Office (ESO), the increase in the cost of fuel has pushed up the Consumer Price Index (CPI) by 1.0% in June 2011 when compared to June 2010. “The inflation in the second quarter is traced primarily to the higher cost of petrol, which pulled up the average spending for transportation by 13.3 percent,” the premier and minister of finance acknowledged this week. McKeeva Bush added that the increase of almost 24% in the cost of electricity, gas and other household fuels also added to the problem.

The sharp increases in energy prices were tempered by continuing declines in housing rentals during the period as compared to a year ago, which meant overall inflation was not as high as it could have been .

However, consumers still faced increased food prices of more than 1.6%, with some categories of food experiencing must higher levels, such meats and meat products at 6.2%, fish and seafood at 5.7% and other food products rising by 4%. A decline in the cost of fruit and veg balanced out the average prices at the supermarket. Transport costs increased by more than 5%, and a 3.1% increase in communications also influenced the inflation rate.

See the report below or visit www.eso.ky

Category: Local Business

Comments (26)

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  1. Anonymous says:

    I read this and laugh whilst crying. Does our govt not see? Are they blind? IF you are not a renter your costs have skyrocketed. The 1 percent increase is really only for lrenters who are largely expats. What if your income is based upon your rental property income? Then you are losing on two fronts. Income has dropped 20 to 30 percent, whilst costs have increased by roughly the same margin. Net result I have half the funds I had two years ago, and working two jobs will likely have my PERSONAL electric cut off at months end. FYI to all of the high payed naysayers, I try not to live above my means. But when a government makes unilateral decisions, long after I have planned my finances, in an f-ing global recession, without considering the input of the people no good can come.
    Regards,
    Ramen Noodles

  2. Charm says:

    22:24 I love it!!! Sell my home and live like an Ex-pat. Fool for thought. 

    • Anonymous says:

      You laugh but I just worked it out. They are right. I could save over 2,000 a month if I rented.

  3. MD says:

    I moved due to roll over.

    Stateside…

    First full month electricty bill was 72 USD  vs   400 CI

    Rent is 800 USD  vs 2000 CI

    More salary…….even after Uncle Sam Tax… I am far better off……"Out of ther PARK"   in comparrison….. Better off!

    Everyone carries guns here, and I hear of little local news of armed robberies or missing people, in comparrison of population.

    Nothing but Love and Respect to Cayman after 7 years.

    Bless!

     

     

     

     

     

     

  4. Anonymous says:

    McKeeva has no grasp of basic economic principles. It is impossible to create economic growth through self-inflicted inflation. Petrol fuels the economy so as soon as he increased the duty on its import, economic growth decreased.

  5. a naw no mouse says:

    Economic explained by MacChavez (while all of his expenses are paid by us). And his over-inflated salary and pension benefits. Not to mention the many questionable "deals)!

  6. Anonymous says:

    I bet my bottom dollar that our smart government will grant another 3,000 status and import some more people to expand our population to the 100,000 people that they believe these islands needs to be self sufficient.  God help us then because the only two industries that we have are tourism and the financial industry and both worldwide is now on the decline. London is burning while the Cayman Island is sinking.  I don't know, I don't know, Idon't know where I'm gonna go when this volcano blow. Oh well home, sweet home, nearer my God to thee.

    • Anonymous says:

      Did u just mix Jimmy Buffett and the Bible? Beautiful irony. Thank you! Keep listening, you may find some more gems, like “The god’s honest truth is that it’s not that simple” and every revelers favorite “let’s get drunk and screw”. Happy Tuesday.

  7. Loren says:

    I would like to know what is the economic forecast for these islands as the USA has lost its AAA rating and the Cayman Islands dollar is pegged to the USD, please someone with such knowledge explain.

    • Adam Smith says:

      If you have to ask that question there is no real point in answering it because it would be over your head.

    • R.U. Kiddin says:

      I can answer it for you:    "Same old, same old."

    • tim ridley says:

      Loren, Cayman has many problems. The US downgrade is not one of them. The downgrade will have no real impact, good or bad, at least in the short to medium term. The US dollar (and thus the Cayman dollar) will continue to be weak (and regardless of the downgrade). That is not necessarily bad for Cayman.

      Economies generally have a better chance of recovering if politicians would stop interfering in the markets. That applies both to the US and Cayman. President Obama and the Congress have been throwing other people's (the UStaxpayers') money around in the US with remarkably little beneficial results. The Premier and the LA here would be well advised to pay heed.

      History tells us that booms and busts are in the nature of things. There is inevitably pain before the end of the tunnel. Governments wasting money trying to mitigate the pain simply leads to more pain down the road.

      Ultimately interest rates have to go up. But that does not appear to be any time soon. If you are a borrower, enjoy it while you can.

       

      Tim Ridley

      • Anonymous says:

        Well it doesn't appear that the market agrees that this is a non-event, Tim. Note that the S&P also gave a negative outlook for the US, indicating that the rating may be cut further within two years. Countries such as China continue to hold/buy U.S. debt but they have little choice since they are already invested to the hilt in it and they don't want to jeopardise the value of what they have already.  Same point re Warren Buffet.

        I think it means that the U.S. debt that constitutes our currency reserves may be a little less secure and stable than they were previously thought to be. True it won't affect our peg to the U.S. dollar and therefore the cost of most of our imports or our attractiveness to U.S. tourists but we had the opportunity to have increased the value of our reserves relative to other currencies had we diversified some of our reserves e.g into gold, the Canadian dollar or the Euro. The increase in currency reserves could then have been liquidated and transferred to general reserves. An increase of $20-30m in general reserves would take us out of the breach of the Public Finance and Management Law.      

  8. Anonymous says:

    Maybe you should approach Cuba or Venezuela for fuel. Cayman Airways flies there and also the US with no restriction with trading with the enemy act. Maybe even Canada?

  9. Anonymous says:

    As a Caymanian I never thought I would have to adapt my lifestyle to the ex pat way of living. But the bottom line is it's a lot cheaper to live as an expat than it is as a local on this island. We have been minimized in our own country.  Explain? As a local you have a house mortgage, insurance, maintenance, lawn service, security alarm service etc, etc… however as a tenant you only have rent (and it's usually cheaper than your mortgage was) , when something breaks you call and they pay to fix it.  And yes, I know but in 20-30 years of mortgage payments you own it but you also get to replace the outdated kitchen, bathrooms, electrical and roof too. Couple that with the worries of another major hurricane and high cost of insurance on top of your mortgage. Now ask yourself, is it really worth it ? Put pen to paper and decide for yourself. I did… I sold my house. 

    • Anonymous says:

      yes but a diet of rice and beans is a lot cheaper…..

    • CSI says:

      It's nothing to do with being a "local" or being an ex-pat.  It's about living within your means. 

      • Anonymous says:

        Are you living within your means?  Would you enlighten us morons how to get $606.00 per month, I have an electricity bill which jumped from 98.00 per month 112.00 for the same amount of usage.  Food for me and my child jumped from 160.00 per month for bare necessities and a lot of rice and beans to almost double that amount.  3 month ago, I had 104.00 left over which made me feel good.  I went to the supermarket last Saturday, searched for all the specials like "Pick 5 for $19.99" and that finished off my 606.00 with not even bare necessities.  There is just so much you can do with 606.00 per month and I just mentioned a couple of the bare necessities.  Then you have the audacity to tell us to live within our means and you do not know anything about us and what we need to survive.   count how we live now is not really "living", just survival.

        • Anonymous says:

          Not a pretty sight, but it never is when there is no job, no man and a child to feed.

        • CSI says:

          Yes, I'm living well within my means – thanks for asking.  You've misinterpreted my earlier comment.  I'm not sure if you were the same person that I originally responded to, but that person was specifically referring to the difference between living as a Caymanian and livingas an Expat.  I sympathize with your difficult situation, but I never called anybody a moron or said it was easy to live on $606.00 per month.  When I had an extremely low income (less than your $606 per month), I did what I had to do.  I shared an apartment with roommates, I ate cheap food, and I did what I could to put away a few dollars a month.  The original poster was referring to mortgage, insurance, etc., which is what prompted me to talk about living within one's means.  There is no shame in renting an apartment rather than owning.  In fact, in today's rental market it's probably a very smart thing to do.  Take advantage of the current high vacancy rates (and thus lower rents), and use the opportunity to put away some of the extra cash you save. 

  10. Anonymous says:

    Inflation at 1%  what a joke!!!.    Th CPI should not include rental prices, just food, electricity, gas and water

     

    , What about people who do not rent (including most pensioners ). Inflation for these people must be 15-20 %

    • The Lone Haranguer says:

      Do not ever let the facts ruin your position. Ignorance is bliss.

  11. Anonymous says:

    did the prenier mention that a good protion of the increase in gss is cause d by his increase in tax on fuel?????

    • Anonymous says:

      Face the facts Cayman Islands.  Your Premier did not have enough honesty to admit that he dpes not pay for fuel, in fact he has very little out-of-pocket expenses, since he pays all his expenses out of the country's coffers.  He once advised that he is within his rights as the Premier, to spend, spend, spend.  I hope the guys in Venezuela have room for him, so they can all form a coilition to ruin as many small countries as possible. 

    • Anonymous says:

      "His" – don't forget the rest of the UDP puppets that voted for it too