Jamaica’s Economic Report -September 2019

The Bank of Jamaica (BOJ) lowered its policy rate in August to 0.50%, as inflation is currently targeted to average 4.3% over the next two years – well within the 4.0-6.0% target. This is expected to stimulate economic activity through private sector credit growth. Credit to businesses and households expanded at a pace of 16.8% y/y in June 2019. The economy continues to grow below its potential, meaning there is room for faster growth without exceeding the inflation target.

BOJ expects average quarterly GDP growth at 1.0-2.0% y/y in the near-term, which is slower than the prior projection of 1.5-2.5% y/y. Unemployment will continue to improve with more jobs anticipated in the services and manufacturing sectors.

The unemployment rate fell by 2.0 p.p. y/y in April 2019 to 7.8% – a strong signal of progress compared to the high of 16.3% in April 2013. Net International Reserves declined slightly in August to USD2.9 billion, while remaining well in excess of the 12-week precautionary benchmark, at 21.8 weeks of import cover for goods and services

Outlook: The IMF expects growth at 1.7% in 2019, 1.9% in 2020, averaging 2.3% for 2021-2024.

See full Caribbean report here

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