Prices fall – if there’s a car in your shopping basket

The cost of living on St Helena has officially gone down – even though the price of housing, healthcare and most food has gone up.

In fact, only those with money to spare for expensive goods are likely to have enjoyed the benefits of a 0.3% fall in the cost of the so-called St Helena shopping basket used to gauge living costs.

That is because cars and “white goods” such as cookers are included in the shopping basket – and the price of those items has gone down for April to June 2013.

The inflation rate for the island – reflecting price rises over a whole year – was also at its lowest for more than a decade at the end of June 2013, at 0.9%.

Price rises over the year from June 2012 to June 2013 include the cost of the television service, local meat, the RMS St Helena travel deposit, and hospital services.

Notable price decreases include the pump price of petrol and diesel, broadband internet services and car purchases.

The drop in vehicle prices results from lower prices in the UK and a cut in freight charges after a change in shipping route.

Electricity tariffs did not go up during the year.

The “shopping basket” used by the government’s statistics office is used to calculate the island’s Retail Price Index (RPI), based on the goods and services that are “most important to the typical household”.

More important items, such as food, are given more points in the calculations for inflation.

The introduction of a minimum wage on 1 June 2013 has also led to a rise in labour costs, which pushed up housing figures, despite a drop in the cost of building materials fell.

The quarterly statistical bulletin says: “The 0.3% decrease in the RPI over the last quarter is largely due to the reduction in vehicle purchase prices.

“Several more regular price reductions are also noted such as petrol and diesel, several food items and miscellaneous household goods.

“The biggest contributions to the headline rate of inflation came from inflation in the food (2.1%), services (5.4%) and housing (0.8%) sub-categories.

“Increases in the services sub-category are a result of an increase in the cost of a hospital stay, crèche fees and domestic services, namely cleaning and gardening.

“Fees for hospital stay, crèche and domestic services have all increased from the previous quarter.”

“Price increases in the food section are always keenly felt as this is such a large part of the basket.

“Increases in local meat are particularly notable.

“A third of the typical household budget is spent on food. Several price increases are noted, but annual inflation is at a lower rate than seen in the previous quarter.”

Overall prices for transport – including the cost of buying vehicles and fuel – fell by 4.4% over 12 months.

St Helena has fared far better than the UK and South Africa on inflation.

In Britain, prices went up by 2.95 in the year to June 2013, a higher rate than the year before. Inflation in South Africa over the same period was 5.5%.

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