HAITI: INFLATION CONTINUES AT HIGH LEVEL

UNCLAS PORT AU PRINCE 001079

SIPDIS

STATE FOR WHA/CAR
EB/IFD/ODF FOR MARGUERITE SIEMER
EB/IFD/OMA
WHA/EPSC
INR/IAA/MAC
STATE PASS AID FOR LAC/CAR
TREASURY FOR ERIN NEPHEW

E.O. 12958: N/A
TAGS: ECON EFIN PGOV PREL HA
SUBJECT: HAITI: INFLATION CONTINUES AT HIGH LEVEL


1. Summary. Year-on-year inflation in June registered 15.8
percent, up slightly from 15.6 percent in May but down from
16.5 percent in April and 16.3 percent in March. However,
the month-to-month inflation figure for June was 1 percent
vs. 0.5 percent for May. Sharp increases in food, fuel and
transportation costs have spurred inflation in recent months
as Haiti heavily depends on food and fuel imports to meet
consumer needs. End summary.


2. As a net importer of food and fuel, Haiti's Consumer
Price Index (CPI) basket is heavily weighted toward food,
fuel, and public transportation. These product
categories make up approximately 67 percent of the CPI,
with food products comprising 50 percent of the total.
Worldwide food and fuel price increases, therefore, have a
disproportionately major impact on Haiti's inflation rate.


3. According to data released by the Haitian Institute of
Statistics, the CPI grew by 1.0 percent in June and 0.5
percent in May. The 1.0 percent monthly variation in CPI
in June over May was largely due to increases in the
following indexes: food and beverages (1.1 percent);
clothing and shoes (1.4 percent); and rent, utilities and
water (1.1 percent).


4. The increase in the food and beverages index is
attributable to price increases for rice (1.1 percent),
ground corn (4.0 percent),bread (4.7 percent),goat meat
(3.4 percent),chicken (2.9 percent),unsweetened evaporated
milk (2.9 percent),cooking oil (3.4 percent),sweet
potatoes (2.0 percent),and raw and refined sugar (0.6
percent). The cost of clothing and shoes increased 1.4
percent in June compared to May and rent, electricity and
water increased by 1.1 percent.


5. The impact of price increases was more severe in the
Northern region (North, Northeast, and Northwest
departments) where the month-to-month inflation rate was
1.7 percent, followed by the metropolitan region (including
Port-au-Prince and surrounding urban communities) at 1.0
percent.
TIGHE