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Business 2022: Food prices rose twice as fast as inflation

Food prices are rising faster than inflation - and since this summer, twice as fast, judging by the figures for each month of July, August and September. (File photograph)

The average Bermuda family did not need fancy government statistics to tell them prices were rising this year - they just needed to go to the grocery store.

But one of the graphs accompanying this story illustrates it as well - food prices rose at twice the rate of inflation and ended up 10 per cent higher than a year earlier.

The overall annual rate of inflation rapidly increased as well, doubling from 2.5 per cent last October to more than 5 per cent in September 2022, the most recent statistic available.

Alarmingly, October 2021 was the last month that the percentage increase in the cost of food for a 12 month period trailed that of the rate of inflation.

Food prices are rising faster than inflation - and since this summer, twice as fast, judging by the figures for each month of July, August and September.

Another graph, Declining construction 2002-2022, should also be a point of concern, as it reflects the value of construction put in place per quarter.

Construction is usually a lagging indicator and therefore the figures for the first two decades of the 21st century are also of major concern.

This, as the figures through to the second quarter of 2022 (Quarterly Bulletin of Statistics) show an even more precipitous drop off.

To borrow money, or otherwise commit capital, for the major expense of building is an indicator of confidence in the economy. The confidence would exist long before the money is committed and long before the work begins.

But the figures show Bermuda never recovered to the state of confidence and growth leading up to the global recession of 2008.

There were some fleeting bright spots around 2010 and 2012, together with a few more within the period 2017 to 2020, although nothing to compare with the steady march higher in the period 2003 to 2008.

The figures for the quarterly percentage movements in GDP in constant prices, End of the recovery or anomaly? are replete with evidence of a slowdown the year prior to the pandemic and an uneven performance ever since.

Retail sales downturn, the annual percentage change of sales by volume for the year to September, is just further evidence of lacklustre sales in retail, although the monthly figures released by government seem to track a pot pourri of items not normally associated with retail.

No matter. There was an actual downturn for 10 out of the twelve months.

Slow recovery is a chart tracking Bermuda tourist arrivals, predominately by cruise ship, and a far cry from the days when tourism was a huge part of Bermuda’s economy.

The artwork demonstrates the sad state of tourism before, during and after the height of the pandemic, and, during and since the entirety of the Fairmont Southampton and most of the Elbow Beach Hotel beds were taken out of commission.

They were the island’s two largest and most active beachfront properties. Even now, it will be years before the Fairmont Southampton returns, leaving a huge hole in the island’s tourism dreams.

Many previously complained that Bermuda government officials put too much emphasis on building international business as the second leg of the economy.

It is a good thing they did.

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Published January 01, 2023 at 7:59 am (Updated January 01, 2023 at 3:48 pm)

Business 2022: Food prices rose twice as fast as inflation

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