Professor Emeritus Andrew Downes

Food and beverage prices rose 26% in the Eastern Caribbean Currency Union between 2021 and 2025, placing pressure on household budgets despite relatively low overall inflation, economist Professor Emeritus Andrew Downes said.

Delivering the 28th Sir Arthur Lewis Memorial Lecture, Downes identified food costs as a central part of the region’s cost-of-living problem because they account for a significant share of household spending and meet a basic need.

Figures presented during his lecture showed that food and beverages represented about 19% of average household expenditure in the currency union. Downes noted that the household spending data were somewhat dated.

The 26% increase was cumulative over the period, rather than an annual inflation rate. It applied to the currency union, which includes Antigua and Barbuda, rather than to any individual member country.

Downes, a former chairman of the CARICOM Competition Commission, explained that overall inflation figures can mask larger increases in particular categories, helping to explain the gap between official statistics and households’ experiences.

He said rising expenses can force families to draw down savings, borrow, seek additional work or switch to cheaper products to maintain their standard of living. Low-income and vulnerable households face particular difficulties, he added.

Downes linked the region’s exposure to rising food prices to its dependence on imports, including fuel used in production, transportation and supermarket operations.

He explained that the prices consumers ultimately pay also incorporate freight and insurance costs, port charges, customs duties, other taxes, business overheads and profit margins.

Those components provide opportunities for governments and regulators to examine ways of easing costs, even when the original price increases come from overseas.

In his closing remarks, Eastern Caribbean Central Bank Governor Timothy Antoine reinforced the distinction between falling inflation and falling prices.

Using the lecture’s food price increase as an illustration, Antoine explained that a basket previously costing $100 would now cost $126. Lower inflation would mean that its price was increasing more slowly, rather than returning to $100.

Downes delivered the lecture on “Competition, Regulation and the Caribbean’s Cost of Living Problem.”

This article was originally published by Antigua News Room. Read the original article here: Food and beverage prices rose 26% in Eastern Caribbean over four years, economist says.