HAITI: INFLATION

UNCLAS PORT AU PRINCE 002066 SIPDIS SIPDIS STATE FOR WHA/CAR EB/IFD S/CRS STATE PASS TO USAID FOR LAC/CAR INR/IAA (BEN-YEHUDA) COMMERCE FOR SCOTT SMITH TREASURY FOR JEFFREY LEVINE WHA/EX PLEASE PASS TO USOAS E.O. 12958: N/A TAGS: ECON EAID PGOV PINS HA SUBJECT: HAITI: INFLATION ¶1. Summary: Inflation for September 2006 was 1.5 percent. Inflation for the past twelve months was 12.4 percent, which overshot the IMF target of ten percent. Failure to meet the inflation target was due largely to the continuing impact of high oil prices. End Summary. Inflation still in double digits in September - - - - - - - - - - - - - - - - - - - - - - - ¶2. According to just-released figures from the Haitian Institute of Statistics, overall inflation for September 2006 was up 1.5 percentage point. Inflation for the past twelve months was 12.4 percent. ¶3. Much of September's rise was due mainly to increases in tuition fees (4.6 percent for the month),school textbooks costs (38.7 percent),rent and utilities (1.3 percent),and transportation cost (1.2 percent). Food price rose by 1.3 percent for the month. Failure to meet the inflation target - - - - - - - - - - - - - - - - - - ¶4. The 12.4 percent inflation rate for fiscal year ending September 2006 means that Haiti missed the IMF target set out in the Emergency Post Conflict Assistance (EPCA) program. The inflation target was ten percent. ¶5. Failure, however, was due to several exogenous shocks, including principally continuing high oil prices. Haiti is very much dependent on foreign oil; high prices hurt transportation and food prices, two of the larger components of the index. Also fueling September inflation was the violent ten-week long protest and strike of truck drivers at the Malpasse Border, which shut down that customs office until mid-September. This made it difficult for many incoming goods from Dominican Republic to reach markets. TIGHE