Central Bank report confirms food prices up since VAT dropped

Thursday, March 24, 2016 - 20:00

The Central Bank is saying that despite the VAT reduction to 12.5 percent, food prices have been increasing.

As a result food inflation for February 2016 was 9.4 percent, an increase from the 4.5 percent recorded back in February 2015.

Headline inflation for February increased to 3.4 percent compared to the 2.4 percent recorded in January.

In its latest monetary policy announcement, the Central Bank says the energy sector contracted by 5 percent in the last quarter of 2015 and for the start of 2016 sales for new cars and cement have taken a hit.

The bank also says that the TT dollar has depreciated by 3 percent against the US dollar over the period January to March.

It says the unemployment rate could increase if the workers who lost their jobs in the energy and construction sectors are unable to secure jobs in other sectors.

The bank has maintained its 4.75 percent repo rate.

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