KINGSTON — Despite the present fragility in the global environment, the Jamaican economy will continue to stabilize, while the reforms being undertaken will lay the foundation for sustained growth.
This, according to the Governor of the Bank of Jamaica, Brian Wynter, as he addressed the recent economic forum convened by the Institute of Chartered Accountants of Jamaica, (ICAJ).
In a wide ranging presentation focused on the theme: "Stability, interest rates and economic growth", Mr. Wynter observed that the current weaknesses in the global environment have made prospects for strong output in the country’s economy during 2011 and 2012 "more daunting."
However, he emphasized that the reforms being undertaken, along with the financial and technical support from the country's international partners, will ensure meaningful growth.
"While continued fiscal consolidation may contribute to a moderation in domestic demand, it is important for us to recognize that the economic reforms that we have set in progress, along with the exceptional financial and technical support from our international partners (IMF, World Bank, Inter-American Development Bank and the Caribbean Development Bank)…these reforms will provide a foundation for sustained growth,” the Central Bank Governor stated.
Mr. Wynter said that progress under the country’s economic plan has already been reflected in an "extended period of almost unprecedented stability in the macroeconomic environment and improved business confidence."
He also observed that economic growth was experienced in the first two quarters of 2011, "reversing the trend of decline that we saw over 13 consecutive quarters before that."
Inflation, he said, is expected to be lower in the second half of the fiscal year, given the projection for slower price increases. Slower relative to what had been expected before given the weak but improving domestic demand.
"Further deceleration in inflation is expected in subsequent years and against this background, interest rates, which have been at their lowest in almost three decades, can be expected to follow on a consistent path," he indicated.
The Central Bank Governor emphasized that the Jamaican economy is in the midst of "a transition to enduring macroeconomic stability; to low inflation rates and sustained growth…so we can go forward and sustain it, lock it in…or we can deviate and loose the value of what’s been achieved."
By Allan Brooks, JIS Senior Reporter