the first time since figures have been kept.

The consumer price index was measured at 1.9 percent for the twelve months to May 1997, the lowest figure officials could remember. The figure marked a 0.3 percent decline from April's 2.2 percent rate.

Government officials would not go on record, but it is suspected that it is the lowest inflation level since the index was first calculated by Government statisticians more than three decades ago.

One problem in determining its absolute lowest point is that the basis by which inflation and the consumer price index is measured has been changed since figures were first kept in 1961.

Nevertheless, with Bermuda already blessed in recent years with some of the lowest inflation figures among developed nations, Government officials have reason to be upbeat.

Finance Minister Grant Gibbons said it represented additional progress in the efforts to generate price stability and enhance Bermuda's international competitiveness.

"Low and stable inflation is necessary to provide an environment in which businesses and individuals can save, invest and plan for the future with confidence,'' he said.

"Employees can be confident that their wages and savings will not be eroded.

And businesses are provided with the opportunity to enhance their international competitiveness.

"Consumer price inflation of less than two to three percent is a goal which many larger economies have set themselves. It is very encouraging to see that we are firmly within that target range in Bermuda.'' But he warned: "We must recognise that the battle against inflation and excessive costs is a continuing one. Everyone must appreciate that wage and price increases above current levels will erode our international competitiveness and damage our international business and tourist sectors.

"Moreover, it is essential that not only our domestic consumers, but also our international customers benefit from this low inflation environment.'' The monthly performance of consumer prices recorded an average decline of 0.1 percent in May, as the all items index, or the consumer price index scale, fell to 105.4 in the month.

It was again the Fuel & Power sector, declining for the fifth consecutive month, that affected the all-items index. A 27.5 percent drop in the fuel adjustment clause contributed directly to the 2.9 percent decline in the sector.

There were marginal movements in a number of sectors with household goods, services & supplies and tobacco & liquor falling. Food prices rose as did education, recreation & reading and the transport & vehicles sector. Rent, clothing & footwear, and, health & personal care remained unchanged month over month.