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Inflation climbs to 2.8%

The increasing cost of health care, especially prescription drugs, was again the main reason behind a rise in inflation, a report released Friday showed.

The Consumer Price Index (CPI) showed that inflation in June was running at 2.8 percent, up from the 2.5 percent in May.

The Department of Statistics said the health and personal care sector was the largest contributor to the year-over-year increase in the CPI.

“This sector has been the leading contributor since September 2010 due to the rising average costs of health insurance premiums and prescription drugs,” the report said. “On average, the cost of Health & Personal Care items increased 7.5 percent since June last year.”

A report last week by the Bermuda Health Council warned healthcare spending could soar to $1.5 billion by 2020, with health costs rising nine percent between 2009 and 2010, from $576 million to $628 million.

Overall, consumers paid 2.8 percent more in June 2011 than they did a year ago for the CPI basket of goods and services.

And between May and June the average cost of goods and services in the Consumer Price Index rose 0.3 percent.

The all-items index increased from the 116.3 index points recorded last month, to 116.6 in June 2011.

This means that the basket of goods and services that cost $100 in April 2006 now costs $116.60.

The report said the fuel and rent sectors also impacted strongly on the annual rate of inflation, as price shifts in these sectors were 11.1 percent and 1.6 percent, respectively.

The fuel and power sector increased 2.8 percent, due to an increase in the fuel adjustment clause. Consumers also paid 3.1 percent more for a cylinder of gas.

The household goods, services and communications sector climbed 1.2 percent in June. This was largely attributed to a 21.9 percent increase in the cost of care services at rest homes.

On average, food prices rose 0.5 percent in June. Among the main items contributing to the increase were the cost of oranges (up 5.1 percent), hotdogs (up 4.4 percent) and cookies (up 3.8 percent).

The rent sector increased 0.1 percent, reflecting a 0.2 percent rise in average rents for controlled properties.

The transport and vehicles sector fell 0.4 percent in June. Hotel room rates and fuel prices fell by seven percent and 4.3 percent, respectively. In contrast, airfare costs increased as average prices climbed by 21.7 percent.

Inflation: Food prices rose 0.5 percent in June

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Published August 15, 2011 at 10:22 am (Updated August 15, 2011 at 10:21 am)

Inflation climbs to 2.8%

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