Inflation rate cools to 1.7%

  • Rising costs: increases in health insurance premiums were one of the main drivers of inflation in May

    Rising costs: increases in health insurance premiums were one of the main drivers of inflation in May

The annual rate of inflation fell to 1.7 per cent in May despite the impact of higher health insurance premiums.

The insurance increases drove health and personal care costs up by 4.1 per cent from May 2017, according to the Consumer Price Index, released today by the Department of Statistics.

Fuel and power costs rose 6.5 per cent from a year earlier, mainly as a result of a 12.2 per cent rise in the fuel adjustment rate on Belco bills, which climbed from 10.25 cents per kilowatt hour in April to 11.5 cents in May.

Other drivers of the rise in the cost of living were food prices, which rose 2.3 per cent year over year, and education, recreation and reading prices, which rose 2.7 per cent.

In the month-to-month analysis, the transport and foreign travel segment saw a 1.2 per cent fall in prices from April, largely driven by a 7.5 per cent dip in the price of overseas hotels and a 4.7 per cent fall in air fares.

The 1 per cent rise in food prices between April and May was influenced by increases in the cost of spare ribs, up 4.2 per cent, potato chips, up 3.5 per cent, and prepared hot meals, up 1.5 per cent.

The 1.7 per cent overall inflation rate was down 0.3 percentage points from the 2 per cent rate recorded in April.

The basket of goods and services that cost $100 in April 2015 now costs $105.10.

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Published Jul 24, 2018 at 8:00 am (Updated Jul 24, 2018 at 8:40 am)

Inflation rate cools to 1.7%

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