BOJ Governor says Macroeconomic Prospects Remain Positive

Bank of Jamaica (BOJ) Governor, Brian Wynter, says the country’s macroeconomic prospects “remain positive as the indicators and outputs continue to show signs of recovery.

“Foreign reserves are above the level deemed adequate and the current account deficit remains low and sustainable. Additionally, market interest rates are at historic lows and fiscal performance continues to be strong,” he points out.

He was speaking at the Central Bank’s quarterly media briefing, held at the BOJ Auditorium in downtown Kingston on Thursday (February 21)

Other notable indicators highlighted by Mr. Wynter include improving labour market conditions, which saw the unemployment rate falling to 8.7 per cent as at October 2018 from 10.4 per cent a year earlier, as stated by the Statistical Institute of Jamaica in the Labour Force Survey for the month.

He further reiterated that growth for the October to December 2018 quarter is estimated to have accelerated in the range of 1.5 to 2.5 per cent, rising above the 1.2 per cent recorded in December 2017.

“The Bank assesses that this pace of growth reflected improvements in external demand, investment and, to a lesser extent, private consumption. The key economic sectors reflecting increased economic activity included mining and quarrying, construction and tourism,” the Governor noted.

Mr. Wynter said BOJ projections are for growth to remain close to current rates over the next two years.

Additionally, he said further improvements in labour market conditions are expected over the same period, “with more jobs in mining and quarrying, finance and insurance, and business process outsourcing”.

“Overall, Jamaica’s macroeconomic indicators continue to reflect entrenched stability, although the economy is… estimated to be operating below its potential,” Mr. Wynter added.

On Wednesday (February 20), Planning Institute of Jamaica (PIOJ) Director General, Dr. Wayne Henry, indicated that the economy grew by an estimated 1.7 per cent during the December 2018 quarter.

The goods producing and services industries were estimated to have grown by 4.2 and 0.8 per cent, respectively, during the period.

The top-performing goods producing sectors were mining and quarrying, up 22.9 per cent; construction, up 3.5 per cent; agriculture, forestry and fishing – 2.6 per cent; and manufacturing – one per cent.

Industries registering the largest growth rates were hotels and restaurants, up 2.5 per cent, and transport and communication – 1.6 per cent.

Dr. Henry said these out-turns resulted in an estimated 2018 calendar year growth average of 1.8 per cent, the strongest since 2006.

The goods producing and services industries were estimated to have grown by 4.8 and 0.8 per cent, respectively.

Mining and quarrying, with 32.5 per cent; agriculture, forestry and fishing – 4.1 per cent; and construction – 2.8 per cent, were the top-performing sectors.

“We estimate growth for Fiscal Year 2018/19 in the range of 1.5 to 2.5 per cent. The outlook for Fiscal Year 2019/20 is also positive, with projected growth within the range of one to two per cent,” Dr. Henry said.