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October 13, 2022

by Eulana Weekes

St. Kitts and Nevis (WINN): The Eastern Caribbean Central Bank (ECCB) disclosed that consumer prices in the Eastern Caribbean Central Union (ECCU) rose by 3.1 percent as at June 2022.

Consumer prices have been on the increase since the beginning of the COVID-19 pandemic in March 2020. The ECCU member countries have experienced notable increases in prices, particularly in energy, utilities and consumer goods. Anguilla has reported an overall increase of 2 percent, Antigua and Barbuda- 3.7 percent, Dominica- 3.5 percent, Grenada -1.2 percent, Montserrat- 1.1 percent, St.Lucia-1.8 percent, St.Vincent and Grenadines- 2.6 percent and St.Kitts and Nevis-1.8 percent.

According to data from the ECCB, fuel and light has seen the largest growth in inflation at 7.7 percent. Following behind is housing and utilities at 6.3 percent, household and furniture equipment at 2.8 percent and food and transport and communication at 2 percent. There has also been price increases on clothing and footwear at 1.4 percent, alcoholic drinks and tobacco at 1.3 percent and personal services at 1.1 percent. Personal services may consist of dry cleaning services, hairdressing services, seamstress or tailor services and home cleaning services.

Inflation has been a growing concern for the Caribbean region prior to the Russian invasion in Ukraine. Inflation and the rise in the cost of goods and services started from the impact of COVID-19 on the global economy, supply chain issues, the shortage of goods and the hoarding of essential goods from larger countries to secure their country’s ability to feed their people.

The Governor of the ECCB recently said that inflation, while a problem now on the wallets of the consumers, will not persist and the region should continue to have confidence in the stability of the EC dollar where US $1.00 is EC $2.70 and has been that way since July 1976.

However, the Governor admitted that cost-of-living is an issue facing the region and indicated that there is still a need for structural reform as it relates to the financing within the ECCU and the wider Caribbean.

“As policymakers and advisors we have to, even as we deal with the immediate crises such as cost of living, the pandemic, we have to press forward with structural reforms. Those require capacity development and you might ask what kind of structural reforms; high energy prices. The Caribbean has the highest energy prices in the western hemisphere. Low broadband connectivity, lack of access to credit, relatively human capital development because of brain drain; those are structural issues,” said ECCB Governor Timothy N J Antoine at a High-Level Capacity Development Talk in Washington, D.C. on October 12, during the 2022 Annual Meetings of the IMF(International Monetary Fund) and The World Bank Group.