You’re not just imagining it — just about every aspect of day-to-day life has gotten more expensive in the U.S. Virgin Islands, according to a V.I. Bureau of Economic Research report released Friday, which says the Consumer Price Index increased by 9.8 percent in 2022. That’s the highest ever recorded, it noted.
The index — which measures the average cost of a basket of goods and services — increased by 8.6 percent in 2021, the report stated. In contrast, the Bureau of Labor Statistics reported that Consumer Prices in the U.S. increased by 6.5 percent from December 2021 to December 2022, it said.
The inflation rate has affected the purchasing power of consumers in the U.S. Virgin Islands, according to the report, a capsule of which may be viewed here. “To put it in perspective, $1.00 in 2021 has increased to a purchasing value of $1.10 in 2022. This means that the average consumer spent about 10 percent more money in 2022 than in 2021, for the same items due to an inflation rate of 9.8 percent,” it said.
While higher prices were seen on all three main islands, the inflation rate rose fastest on St. Thomas (14.5 percent), followed by St. Croix (9.5 percent), with price growth the slowest on St. John, at 5 percent, the report stated.
The high cost of food has had a significant impact on consumers in the territory. Since 2021, there has been a 15.2 percent increase in food prices, the report stated. This rise is attributed to higher prices for dairy products (38.3 percent), meat products such as beef (29.4 percent), poultry (35.1 percent), and fresh fruits and vegetables (16.7 percent) in 2022.
Housing expenses, which make up nearly 42 percent of the CPI’s weighting, kept on increasing, with an annual rise of 10.1 percent, according to the report. Rents and household costs also went up considerably over the year, by 5 percent. Furthermore, prices for durable goods including furniture and household appliances were 11.3 percent higher than they were a year ago, it said.
Due to a 47.1 percent increase in gasoline prices, transportation costs rose 18.5 percent, leading to higher average annual inflation in 2022, the report said.
In recent months, there has been a moderation in the rise of consumer prices, indicating that inflation may ease in 2023. To combat persistent inflation in the U.S. economy, the U.S. Federal Reserve has increased its short-term borrowing rate, the report stated. The Fed aims to make borrowing more expensive by raising its interest rates and decreasing demand for goods, services, and labor, it noted.
For more information, visit www.usviber.org.