Road Town, Tortola - Preliminary statistics from the Development Planning Unit (DPU) reveal that the inflation rate for the Virgin Islands for 2009 was approximately three percent compared to 7.5 percent in 2008.  

Director of the DPU, Mr. Raymond Phillips explained that lower petrol prices and airfares contributed to the reduction in the transportation component of the Consumer Price Index (CPI) which fell by approximately four percent from last year. 

Statistics show that although average gasoline and diesel prices continued to rise in 2009, they were still below 2008 rates.  The price for this commodity peaked in July 2008 and decreased steadily until the end of the year. However, in 2009 petrol prices rose consistently and according to DPU statistics, average gasoline and diesel prices per gallon at the end of December, 2009 stood at $3.83 and $3.69 respectively. 

The airline industry suffered significantly given the reduced demand for air travel as a result of the global economic crisis.  Prolonged periods of discounted airfares resulted in lower travel costs for consumers in 2009 and therefore impacted the transportation element of the CPI.

While savings were realised in petrol and air travel, food prices on average increased by six percent in 2009.  Increases in the price of alcohol, poultry, fish and beef products contributed to this rise.  However, food price increases in 2009 were lower than in 2008 where prices increased by approximately 13 percent. 

Marginal increases in the services, clothing and footwear, housing and furniture and household supplies categories of the CPI also contributed to inflation in 2009 but prices on a whole increased at a lower rate than in 2008. 

The DPU Director told the Department of Information and Public Relations that “The lower levels of inflation experienced in 2009 were not unique to the Virgin Islands but rather were experienced across the region and globally, mainly as a direct result of the reduced demand for goods and services given the current economic woes.”

He added, “Inflation rates may increase in the future as the global economy recovers and consumer and institutional spending resumes.”

In a related development, the DPU is taking measures to improve its assessment of the inflation rate.  According to the DPU Director, the Household Expenditure Survey which is currently ongoing, collects information on the spending of household members in the Territory and is critical to updating the base for the inflation rate which is 15 years old.  “An updated base will ensure a more representative monitoring of changes in prices and also provide information for the measurement of the cost of living in the Territory,” the director indicated.

Mr. Phillips is also requesting the continued support and cooperation of the public as the Household Expenditure Survey draws to an end.  “This is an extremely important exercise. Without this survey the BVI would not be able to determine the price movements in the Territory,” he stated.

The Development Planning Unit is responsible for acquiring and analysing statistics to facilitate economic planning and analysis. The unit functions under the umbrella of the Premier’s Office.