JIS News

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  • Governor of the Bank of Jamaica (BoJ), Brian Wynter, is reporting that despite significant economic shocks over the past two years, inflation remains in single-digit, at 8 per cent.
  • This, he said, has resulted from the transformation taking place under the Government’s economic reform programme (ERP), which aims to spur economic growth.
  • Mr. Wynter informed that headline inflation stood at eight per cent at the end of June 2014, down from 8.8 per cent at the similar point last year.

Governor of the Bank of Jamaica (BoJ), Brian Wynter, is reporting that despite significant economic shocks over the past two years, inflation remains in single-digit, at 8 per cent, and has trended down between September last year and the end of June this year.

This, he said, has resulted from the transformation taking place under the Government’s economic reform programme (ERP), which aims to spur economic growth; contribute to reducing Jamaica’s public debt; maintain the country’s balance of payments schedule; and enhance its global market competitiveness.

Mr. Brown was speaking at the BoJ’s quarterly media briefing, held at its downtown Kingston offices, on Monday, August 25.

Providing a breakdown of the review, Mr. Wynter informed that headline inflation stood at eight per cent at the end of June 2014, down from 8.8 per cent at the similar point last year, and down from 8.3 per cent at the end of March 2014.

“Not least of the shocks that occurred during the period was the 13.3 per cent and 10.8 per cent depreciation in the exchange rate in the last two fiscal years, respectively. Also, last year there was the 25 per cent increase in bus and taxi fares,” he said.

Mr. Wynter noted that historically, such a combination of shocks would have been enough to “send inflation spiralling into double-digit territory.” However, he noted that this did not happen.

Pointing to some of the factors which accounted for this resilience, the BoJ Governor noted that the strong fiscal conditions created by the reform programme have restrained the ability of producers and retailers to pass on to consumers the impact of some of these shocks, especially the exchange rate depreciation.

“In the productive sector, especially in agriculture, which has a significant impact on inflation, there were significant improvements in efficiency and output, with the advent of supply-side initiatives, such as the agro parks,” he said.

Mr. Wynter emphasized that maintaining the current stance of fiscal discipline will continue to temper the emergence of excess domestic demand, and thereby deepen the economy’s resilience.

He further noted that the preservation of economic stability, together with the maintenance of recent gains in external price competitiveness, will allow the productive sector to grow faster, led by exports and competitive import substitution.

“I think in addition to these, from an inflation perspective, are the expectations of the public, which represent a critical factor in managing inflation in a market economy like Jamaica’s. If we are going to achieve our objectives, we have to pay careful attention to these expectations,” the Governor said.

He argued that transparency and the availability of timely information enable the public to draw reasoned conclusions, within a time period that allows them to act in their best interest, are important to monetary policy.