HAITI: JULY INFLATION ROSE .6 PERCENT

UNCLAS PORT AU PRINCE 001641 SIPDIS SIPDIS STATE FOR WHA/CAR EB/IFD S/CRS SOUTHCOM ALSO FOR POLAD STATE PASS TO USAID FOR LAC/CAR INR/IAA (BEN-YEHUDA) COMMERCE FOR SCOTT SMITH TREASURY FOR JEFFERY LEVINE WHA/EX PLEASE PASS USOAS E.O. 12958: N/A TAGS: ECON EAID PGOV HA SUBJECT: HAITI: JULY INFLATION ROSE .6 PERCENT ¶1. According to the latest figures from the Haitian Statistical Institute, overall inflation for July 2006 was .6 percent, resulting in an annual increase of 12.6 percent since July 2005. This is due to a price increases in clothing (4.3 percent),housing (5.6 percent),water (1.5 percent),energy (1.1 percent for propane gas),and health costs (9.8 percent). With rising prices and the school year beginning today, government employees are pressuring the GOH for a "fourteenth month" payment to help with school costs. (Note: At US $400 per capita GDP, it is estimated parents spend 25 percent of their salary -- about US $100 -- to send one child to school each academic year. The "fourteenth month" salary payment is a vestige of former President Jean Bertrand Aristide, which many government workers have come to expect. End note.) ¶2. Comment: A high inflation rate continues to plague Haiti. The IMF has targeted a single digit inflation rate for the next calendar year and claims that this is the greatest benefit the government could give Haiti's poor, to whom immediate purchasing power is more important than other long-term goals set out by the new government. TIGHE