Average inflation in Jamaica

Average inflation measures the average change over the year in the prices of the basket of goods and services consumed by Jamaican households, based on the Consumer Price Index. It is compiled by the Statistical Institute of Jamaica (STATIN) and tracked by the Bank of Jamaica.

It is obtained from a regular price survey across a sample of outlets and regions, weighting each product by its spending share. Average inflation is the mean of the year's monthly rates of change relative to the prior year, expressed as a percentage.

Inflation is the central reference for the Bank of Jamaica's monetary policy, which operates an inflation target. A reading above target puts upward pressure on interest rates and on the Jamaican dollar; its moderation gives room to ease.

As an annual average it smooths the year's peaks and reacts with a lag. The economy is highly sensitive to imported energy and food prices and to weather events, which adds volatility; it only measures the defined basket rather than every good in the economy.