Inflation in Trinidad and Tobago has slowed to under six per cent, its lowest level in more than four years.

The latest data from the Central Statistical Office showed that headline inflation declined sharply in July to 5.9 per cent from 8.4 per cent in June, and down from a peak of 15.4 per cent in October last year, the Central Bank said in a statement yesterday.

’Headline inflation is now at the lowest level since January 2005,’ the bank said, adding that the rate of headline inflation has slowed markedly since the beginning of 2009.

Food price inflation, which has been the main contributor to headline inflation, declined significantly to 10.1 per cent year-on-year in July compared to 16.5 per cent in June, and down from a high of 34.6 per cent in September 2008.

The current rate of food price inflation is the lowest recorded since July 2004, the bank stated.

Measured on a year-on-year basis to July 2009, there were declines in the prices for bread and cereals and milk, cheese and eggs.

Four other categories recorded lower price increases.

Slower year-on-year increases were recorded for oils and fats (11.1 per cent compared to 14.5 per cent); fruit (28.7 per cent compared to 36.7 per cent); vegetables (8.2 per cent compared to 23.3 per cent) and sugar, jam, honey, syrups, chocolate and confectionery (4.6 per cent compared to 7.4 per cent).

Core inflation, which excludes the food component, also trended downwards in July, the bank said. On a year-on-year basis, the rate of core inflation fell to 3.8 per cent from 4.5 per cent in June 2009.

The rate of increase in the housing, water, electricity, gas and other fuels sub-index slowed to 2.0 per cent compared to 4.2 per cent in June, the Central Bank said in its repo report.

The bank lowered its repo, or overnight lending rate to commercial banks, to 6.75 per cent against the backdrop of continued slow demand for credit in the country.