Increase in GDP Expected for March Quarter – BoJ
February 21, 2012The Full Story
The Bank of Jamaica (BoJ) says the country’s real Gross Domestic Product (GDP) is expected to increase in the range of 1.0 per cent to 2.0 per cent for the March 2012 quarter, largely driven by growth in agriculture, forestry and fishing; electricity and water supply; hotel and restaurants; and construction and installation.
The Central Bank is also forecasting that domestic inflation, as measured by the change in the consumer price index (CPI), will be in the range of 1.0 per cent to 2.0 per cent in the March 2012 quarter.
Presenting the Quarterly Monetary Policy Report on February 20, Governor of the Bank of Jamaica (BOJ), Brian Wynter, explained that “underpinning the outlook is the forecast for a decline in imported inflation, supported by relative stability in the exchange rate."
He further noted that in addition, “inflation expectations and domestic capacity conditions” are expected to be relatively stable.
“The inflation rate for January, as reported by the Statistical Institute of Jamaica (STATIN), was 0.4 per cent, similar to the rate in the previous two months. This outturn is in line with the Bank’s expectations for the month as well as the 1.0 per cent to 2.0 per cent forecast for the March 2012 quarter. Given the projection for the March 2012 quarter, the Bank has maintained its forecast for inflation in the target range of 6.0 per cent to 8.0 per cent for the 2011/12 financial year,” he stated.
The Central Bank Governor advised that the Bank’s projection is supported by the results of the bank’s Inflation Expectations Survey, which is undertaken quarterly by STATIN.
“In particular, the survey undertaken in the December 2011 quarter indicated that the level of inflation expectations has remained fairly stable since the March 2011 quarter. In addition, respondents’ expectations of future depreciation in the exchange rate were largely consistent with the movement over the past year. These responses are encouraging as we gradually move towards an inflation targeting framework,” the Governor said.
By Allan Brooks, JIS Senior Reporter