That report, “Monthly Economic and Financial Developments May 2006”, says that due to higher energy costs, average consumer prices in The Bahamas rose by 2 percent in the 12-month period ending April 2006.
“The rising cost of oil and other commodities remains a cause for concern,” said the report, released by the Central Bank on Monday.
It noted that the 2 percent increase compared to an expansion of 1.2 percent in the previous year.
The most significant increases were seen in average costs for food and beverages (4 percent), other goods and services (3 percent) and housing (2.7 percent), associated with the fuel surcharge on electricity consumption.
Last month, BEC announced that the fuel surcharge was 10.3676 cents per kilowatt-hour, compared to 9.2901 cents in May, which was the lowest the fuel surcharge was since October 2005.
The 10.3676 cents in June compared to 6.6486 cents in June 2005, and 4.6237 cents in February 2005.
It means that consumers paid higher electricity costs last month.
In the House of Assembly in June, Minister of Agriculture and Marine Resources Leslie Miller, formerly the Minister of Trade and Industry, said BECﾒs fuel cost for fiscal year 2005/2006 was $164,419,000 compared to $82,519,000 for fiscal year 2002/2003.
“The impact of this was an increase in the fuel surcharge which all of us had to pay,” Minister Miller said. “I pay my electricity bill at my home so I feel the pain just like all other consumers.”
He said the average cost to the consumers for fuel surcharge last year was $178.93 for low income households; $894.63 for middle income households; and $1,789.25 for upper middle income households.
But the International Monetary Fund (IMF) said in a report on The Bahamas following its recent staff visit here that even in the face of high oil prices, the economy grew by two and three quarters of a percent from an average of one and three quarters in 2002 ﾖ 2004.
It is expected to grow by four percent in 2006. This, according to the IMF, was led by the tourism sector, as well as by hotel and residential construction.
The IMF also noted, however, that average inflation rose to two and a quarter percent in 2005 from one percent in 2004, mainly reflecting “the full pass-through” of the rise in world oil prices.
The IMF said inflation was expected to ease to one and three quarters of a percent in 2006.
In its report released Monday, the Central Bank also said other components registered average price hikes of less than 2 percent with the exception of recreation and entertainment services and clothing and footwear costs, which contracted by 1.41 percent and 0.9 percent, respectively.
By: Candia Dames, The Bahama Journal
