Aug. 17, 2001 — What cost Virgin Islanders one dollar to purchase in January cost almost $1.03 six months later, according to the territory’s newly initiated consumer price index.
Until now, the Virgin Islands did not have a CPI, which is a way to measure the cost of goods and services purchased by local households over time. In 1997, however, the Eastern Caribbean Center at the University of the Virgin Islands conducted a consumer expenditure survey. The results were used to create a "market basket" of a fixed set of goods and services to measure the territory's CPI. The market basket consists of 174 items, including food, beverages and tobacco, housing apparel and transportation, medical care, recreation, communication and other goods and services.
According to the Economic Research Bureau, the CPI rose from its baseline of 100 in January to 100.7 for the first quarter of 2001, and then to 102.5 for the second quarter.
If the trend in the cost of goods and services continues in the next six months, the rate of inflation in the territory will exceed 6 percent at the end of the year, according to bureau analysts. That compares to a 3.4 percent rate of inflation on the mainland and 6.4 percent in Puerto Rico.
Carmelo Rivera, president of the St. Croix Chamber of Commerce, said the CPI is important for measurung inflation and for adjusting wages and salaries for employment contracts.
"It does give us a good, reliable basis to make decisions on salaries and to make negotiations with unions," Rivera said. "We also see how far the purchase power of the dollar goes."
