BOJ Forecasts Inflation at 5.5 to 7.5 Per Cent for 2015

The Bank of Jamaica (BoJ) is forecasting that inflation will be within the range of 5.5 and 7.5 per cent over the course of 2015.

BoJ Governor, Brian Wynter, said this will primarily result from movements in global prices for oil and other commodities.

Speaking at the BoJ’s quarterly media briefing at the institution’s offices in downtown Kingston on Thursday, February 26, Mr. Wynter explained that based on this forecast, inflation during 2015 “is likely to fall well below the range for the full year, before rising later in the year.”

“Lower than expected international commodity prices and weaker than expected domestic demand, could cause inflation to end up below the forecast range. Initiatives geared at an expansion in domestic agriculture could also result in lower prices for these crops. Conversely, persistently high inflation expectations among businesses, and the public at large, and the potential for a stronger than anticipated pass-through from exchange depreciation, could cause inflation to end up higher than the forecast range,” he explained.

Mr. Wynter pointed out that January recorded negative inflation, coming out at -0.5 per cent. This, he informed, resulted in an annual inflation rate of 5.3 per cent for the preceding 12-month period.

“This is significantly lower than the 9.3 per cent recorded for…the 12-month period to… January 2014. There is now a strong likelihood that inflation for fiscal year 2014/15 will fall below the target range of seven and nine per cent,” he stated.