Owen James’s latest bulletin has scotched reports of “extremely rapid” price rises - and a “myth” that figures have been manipulated.
But the official figures do not take account of all living costs – especially increasing housing rents.
The island’s inflation figure is based on a so-called shopping basket of products: the prices of those goods in the shops are tracked in order to give an inflation figure.
“Contrary to popular belief, inflation is not at 10%,” said Owen.
“Annual inflation on the retail price index stands at 3.9%, down by 2.2 percentage points from the previous quarter.
“Despite reports in the media, the last time annual RPI inflation broke the 10% barrier was over three years ago.”
He said annual inflation had averaged 6.1% over the past year – slightly below the five-year average.
He said: “There also seems to be a perception that inflation for low income households is higher than the average. The latest statistical news bulletin suggests this might not be the case.”
Figures suggested the opposite, he said.
“There is also a myth doing the rounds suggesting government adjusts the basket of goods and services used to calculate the RPI to suit its needs. This is not true.
“The RPI basket is based on a survey of households. This survey is carried out every eight years. The basket does not change during the interim and formulating it is a scientific process and not one which can be influenced by government or anyone else.
He said inflation rose last year for various reasons – including that people had more money to spend after changes to tax allowances and a government pay review. As that effect wore off, inflation had settled down.
And there was no rampant inflation in the countries St Helena traded with, said Owen.
He said the strength of the pound against the South African rand meant cheaper imports, “although this is not necessarily reflected in the price shops charge.”
Higher inflation could be the result of rising standards of living, he said.
“There are tentative signs of the economy growing. This should only continue as investment flows into the island and the airport project steps up its pace.
“The result of this should be an increase in wages. Consequently, inflation rates may increase, but that’s not necessarily a bad thing.”