Jamaicans have entered the New Year in a season of economic turbulence. Layoffs and rising prices are the order of the order due to economic contraction and a depreciating dollar. For just the month of January alone, the Jamaican dollar loss about six per cent of its value, crossing the $85 mark to the US dollar.
The impact has been swift and brutal on consumers with the island’s major distributors increasing prices by as much as 15 per cent. Wisynco managing director William Mahfood told the Jamaica Observer that his price adjustment last week Monday was the third price increase on imported products since the start of the year, while it was the first time he had to up the price on locally manufactured goods- accumulatively increasing the average price of his products by 15.5 per cent.
Ingrid Hayman, marketing manager for H D Hopwood, said despite raising prices by six per cent in December, her company effected another six per cent increase last week “solely due to the devaluation”.
These companies distribute almost everything, from baby food to paper products.
“All you have to do is watch the dollar. No matter what, we are going to see it (prices) go up,” said Docky Lym, owner of Brooklyn Supermarket.
Businesses operating in the construction sector, however, can’t afford to raise prices because of low demand.
“In our industry we have a recession which makes it very difficult to increase prices,” said Arc Systems principal Norman Horne of the building and construction sector.
“Many companies have taken foreign exchange losses,” added Horne. “Unless you have a strong capital base some companies will fold. We will be able to make it through.”