Caribbean News
Economy Doing Well says BOJ Governor
#Jamaica, May 27, 2022 – Bank of Jamaica (BOJ) Governor, Richard Byles, says the economy has been “doing well”, largely based on the latest growth and employment out-turns.
Speaking during the BOJ’s digital quarterly media briefing on Tuesday (May 24), Mr. Byles referenced data from the Statistical Institute of Jamaica (STATIN), showing that the economy grew by 6.7 per cent during the October to December 2021 quarter.
He said this out-turn was indicative of improving economic activity, noting that the level of growth recorded during the period was faster than that for July to September 2021.
“For the year 2021/22, the Bank expects real GDP (gross domestic product) growth to be in the range of seven to 10 per cent,” the Governor said.
Mr. Byles further indicated that growth in 2022/23 is projected to be in the range of two to four per cent.
“The Bank expects that this GDP growth will continue to be driven by the services industry, particularly tourism. The forecast also assumes that production at one of Jamaica’s main alumina plants [JAMALCO], which had been temporarily closed, will resume by June 2022,” he said.
Mr. Byles highlighted the fall in the unemployment rate to a historic low of 6.2 per cent, based on STATIN’s January 2022 labour force survey, as “an exceptional performance, by any measure”.
He noted, however, that the economy “is not yet out of the woods”, citing the impact of the Ukraine-Russia conflict and the emergence of a firth wave of the coronavirus (COVID-19) pandemic.
He pointed out that conflict “has fueled further significant increases in international commodity prices and has contributed to a substantial rise in global and domestic inflation”.
With inflation tracking above the upper end of the Bank’s four to six per cent target, Mr. Byles said the BOJ is
cautiously optimistic that there could be some respite in sight, “provided that geopolitical tensions [between Ukraine and Russia] do not escalate”.
The rate of inflation for the 12-month period ending April 2022 was 11.8 per cent.
The Governor noted that while already high international commodity prices are expected to increase further over the next few months, the global consensus forecast is for a fall during the second half of 2022, influencing a decline in inflation among the country’s trading partners.
“Jamaica’s inflation is expected to follow a similar pattern, rising in May and June, but falling in the second half of the year. After carefully considering all the risks around this outlook, it is our view that the Bank of Jamaica should continue its programme of monetary tightening until we have seen the projected turn in inflation materialise,” he noted.
The Bank’s Monetary Policy Committee voted earlier this month to increase the policy rate by a further 50 basis points, to five per cent, effective May 20, 2022.
Mr. Byles said this decision was based on the BOJ’s forecast for further increases in inflation over the next two months, before the rate begins to decline.
“This forecast is, however, conditional on our assumption that tensions between Russia and Ukraine do not escalate and inflation among Jamaica’s trading partners fall,” he added.
Mr. Byles said the Bank anticipates that these measures will continue to cause interest rates on deposits and loans to rise further, “making savings in Jamaican dollars more attractive, relative to foreign currency assets, and borrowing in Jamaican dollars more expensive”.
“In turn, these measures will help to reduce the demand for foreign currency, leading to continued stability in the exchange rate, and will reduce demand in the economy, limiting the ability of businesses to pass on price increases to consumers,” he pointed out.
Release: JIS
Contact: Douglas McIntosh
KINGSTON, April 29 (JIS):
Minister without Portfolio in the Ministry of Economic Growth and Job Creation, Senator the Hon. Matthew Samuda, says the outcome of discussions arising from the Jamaica National Stakeholder Consultation on Climate Services and the 1st National Climate Forum (NCF-1) will assist in guiding the Government’s planning for climate change.
This, he points out, is important for climate mitigation as well as building Jamaica’s resilience.
“We look forward to the discussions that will, no doubt, take place. We look forward to the basis of planning for the Government to streamline its investments to ensure you have the tools that you need to better advise us, that the WRA (Water Resources Authority) has the tools to digitise its monitoring network, and that all of the agencies that touch our planning mechanisms have the tools. But we need to know what we are facing, and we’re guided by your expertise,” Minister Samuda said.
He was addressing the opening ceremony for the Jamaica National Stakeholder Consultation on Climate Services and the 1st National Climate Forum (NCF-1) at the Courtyard by Marriott Hotel in New Kingston on Monday (April 29).
Senator Samuda said given the fact that the climate has changed and continues to do so, investments in and collaborations on building Jamaica’s predictive and scientific capacity must be prioritised.
“Ultimately, we need to be able to assess our current climatic realities if we are to better plan, if we’re to insist and ensure that our infrastructure meets the needs that we need it to. I’m very happy that this event is happening… because this is a critical issue.
“Jamaica, last year, faced its worst and most severe drought… and this year, we’re already seeing the impacts of not quite as severe a drought but, certainly, a drought with severe impacts, especially in the western part of the country,” he said.
Principal Director, Meteorological Service of Jamaica, Evan Thompson, explained that the forum aims to, among other things, establish a collaboration platform for climate services providers and users to understand risks and opportunities of past, present and future climate developments, as well as improve inter-agency coordination of policies, plans and programmes.
Among the other presenters were Ambassador, European Union to Jamaica, Her Excellency Marianne Van Steen; Chief Scientist/Climatologist, Caribbean Institute for Meteorology and Hydrology, Adrian Trotman; and Head, Regional Climate Prediction Services, World Meteorological Organization, Wilfran Moufouma-Okia.
The Meteorological Service of Jamaica hosted the Jamaica National Stakeholder Consultation on Climate Services and the 1st National Climate Forum (NCF-1) in partnership with the Caribbean Institute for Meteorology and Hydrology and the World Meteorological Organization.
The National Stakeholder Consultation is a governance mechanism that guides how different sectors or actors work together to create products that contribute to adaptation and resilience-building. It seeks to create a road map for the development and implementation of climate services to inform decision-making.
NCF-1 aims to bridge the gap between climate providers and users. It increases the use of science-based information in decision-making and operations with the aim of generating and delivering co-produced and co-designed products and services.
CONTACT: CHRIS PATTERSON
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