The rate of inflation dipped to a two-year low of 2.8 percent in June according to the latest figures released by the Department of Statistics.

While consumers paid 2.8 percent more for the basket of goods and services in the Consumer Price Index in June 2005 compared to June 2004, the annual rate of price movement contracted by 0.3 percent compared to the 3.1 percent posted in May 2005 due mostly to lower fuel and car prices, discounted airfares and a slowing in the price for health care services.

The last time the rate of inflation dipped this low was March 2003 when it was measured at the same 2.8 percent.

Between May and June 2005, the average cost of goods and services in the consumer price basket edged up a nominal 0.1 percent compared to 0.3 percent the previous month.

The Department of Statistics also recorded notable price increases in June for self-prescribed drugs and personal care services such as ladies hairstyling, facials, manicures, and body massages.

While consumers paid 0.1 percent less for health care products year-on-year, statisticians recorded a 9.3 percent increase in the price of prescription medicines since March due to higher dispensary fees and a rise in wholesale drug prices on the market.

The price of food purchased in restaurants rose 0.9 percent from May to June pushing the Food Sector up 2.9 percent year-on-year.

The Rent sector edged up 3.1 percent over June 2004 as the average cost for rent controlled properties rose 0.3 percent from May 2005 while the average cost for non-controlled rented properties showed little movement.

The Tobacco and Liquor sector advanced 2.1 percent over June 2004 with alcohol prices increasing 0.5 percent as a result of 1.1 percent increases on the price of beer and 0.2 percent increases in the price of wine during the month. In addition, cigarette prices edged up an average of 0.2 percent.

The Education, Recreation and Reading sector rose 5.9 percent on the same period of 2004 due to a 0.7 percent increase on the price of news stand magazines and a 0.3 percent increase in the cost of boat fuel for the month.

The Fuel and Power sector rose two percent over June 2004 on a 3.5 percent decline from May to June in the price of a cylinder of propane fuel from an all-time high of $118 a cylinder to $114 a cylinder.

However, the Fuel Adjustment Clause remained at 5.3 cents per kilowatt hour for the sixth consecutive month, and did not affect the electricity component of the index.

The Transport and Vehicles sector rose 5.4 percent with month-on-month price increases recorded at 1.3 percent and 1.2 percent for the cost of premium and mixed gas and a 0.2 percent rise in the average cost of motorcycles. This was offset by by a 1.6 percent price decline in airfares and a 0.5 percent decline in the cost of new cars.

The Household Goods, Services and Supplies sector and the Clothing and Footwear sector remained relatively static for the month, showing no price movements at the sector levels. These sectors, however, recorded year-on-year increases of 1.2 percent and 2.1 percent respectively.