BOJ Says Macroeconomic Indicators Continue to Improve

Bank of Jamaica (BOJ) Governor, Brian Wynter, says Jamaica’s overall macro-economic indicators continue to improve.

Speaking at the bank’s quarterly media briefing at the BOJ Auditorium, downtown Kingston, on Monday (May 21), the Governor pointed out that inflation is low, the net international reserves (NIR) is increasing and the balance of payments, while projected to “widen somewhat” will remain at “sustainable levels”.

Additionally, the Governor said market interest rates are at record lows and “still falling”, while fiscal performance remains strong.

Meanwhile, Mr. Wynter is projecting modest acceleration in economic growth ranging between 1.5 and 2.5 per cent per quarter over the next two years with inflation expected to remain contained.

The expectation is for inflation to remain low and anchored at the lower end of the bank’s target of four to six per cent.

Mr. Wynter said the forecast is supported by buoyant conditions in the United States and some of Jamaica’s other major trading partners.

Additionally, he said the forecast also anticipates that domestic demand will remain restrained by continuous fiscal consolidation.

The Governor noted that the economy continues to show signs of gradual but sluggish recovery, pointing out that the estimated out-turn for the January to March 2018 quarter ranged between one and two per cent.

This, he pointed out, is above the 0.1 per cent recorded in March 2017 and above the 1.1 per cent out-turn for December 2017, adding that the March 2018 estimate “reflects some growth in net exports”.

Mr. Wynter said improving economic conditions also spurred marked improvement in the labour market.

The Governor said that the reduction in unemployment to an all-time 9.6 per cent low in January 2018, according to the Statistical Institute of Jamaica, reflected the generation of an additional 22,000 new jobs.

“Along with projected growth in GDP, labour market conditions will continue to improve over the next two years, (but) that may, at some point, support wage-related inflation in Jamaica if labour productivity does not improve,” Mr. Wynter said.

The Governor pointed out that against the background of the “benign” outlook for inflation, “the Bank of Jamaica will continue to have an accommodative policy stance, aimed at steering inflation towards the (BOJ’s) target of four to six per cent”.