Inflation at -0.8 Per Cent to 0.2 Per Cent for March Quarter

Governor of the Bank of Jamaica, Derick Latibeaudiere has said that inflation for the March quarter was expected to be within the range of -0.8 per cent to 0.2 per cent.
This is a sharp decline over the December quarter, where inflation was recorded at 6.4 per cent.Mr. Latibeaudiere, who was speaking at the quarterly press briefing held at the Bank’s Training Institute downtown this morning (Feb. 10) reported that core inflation was expected to normalize to approximately 1.0 per cent in the March quarter, given the prevailing favourable monetary conditions.
“The improved inflation outlook for the March quarter is largely predicated on the post-hurricane recovery of some domestic food supplies, which should lead to lower prices for these commodities,” he pointed out.
He emphasized that based on recent trends the Bank was also expecting reductions in the prices of some international commodities. “The continued stability in the foreign exchange market should also serve to mitigate the impact of imported inflation,” he added.
Meanwhile, he said that there should be some inflationary impulses from the recently announced increases in the minimum wage and hospital fees. “Other price impulses could also emanate from the expected increases in motor and health insurance premiums, rents and other fees. There is also a risk to February’s inflation emanating from expected increases in the price of bread and other baked products,” he announced.
Given the expectations for the March quarter, the Governor said headline inflation was expected to be in the range of 10.8 per cent to 11.8 per cent for the fiscal year.
On the issue of economy growth, the Bank’s preliminary assessment indicated that the economy declined in the December 2004 quarter, however the Governor emphasized that the economy was expected to rebound in the March 2005 quarter, as recovery from the damage caused by Hurricanes Charley and Ivan continued.
Growth, he said, was expected in the goods-producing and services sectors, particularly mining, manufacturing, construction, basic and miscellaneous services. “The medium-term prospects for growth also remain positive given the projected strong increase in foreign direct investments as well as the indications of increasing investor confidence. In addition, continued buoyancy in the world economy augurs well for Jamaica’s exports, particularly alumina and tourism services,” he stated.

JIS Social