EPOC: Despite Recovery, Economy Remains Vulnerable

According to Chairman of the Economic Programme Oversight Committee, (EPOC) Keith Duncan, says amidst signs of economic recovery, Jamaica’s economy remains vulnerable.

EPOC had met to review the macro fiscal programme of the Government of Jamaica and the monetary performance of the Bank of Jamaica for the 2021-2022 fiscal year. The findings were revealed in the committee’s quarterly media briefing, Friday, September 25.

According to Duncan the GOJ tax revenues, April to July 2021, are $17.1 billion ahead of budget and 39.4% ahead of the previous year, due to recovery in international travel and tourism.

July 2021 tax revenues were noticeably ahead of budget, which the ministry of finance and public service infers, are strongly correlated to the reduced COVID-19 restrictions. He notes the reopening of the economy allowed an increase in tax revenues.

Also highlighted in the report, businesses expect inflation to trend up to 7.4% in the next 12 months. Remittances remain strong increasing by 25.1 percent for the fiscal year to July 2021 relative to the corresponding period in 2020 but are expected to slow over the current fiscal year.

Net international reserves are more than adequate at us $3.93 billion. Meanwhile, COVID-19 positivity rates remain high while vaccination levels increase but lag other countries in the region.

The Bank of Jamaica is signaling a likely rate increase as inflation breaches its target range without further monetary policy interventions, the BOJ anticipates that inflation over the next 9-12 months will be higher than previously expected and exceed the 4-6% targeted band due to higher international commodity prices, shipping costs and imported inflation.

This has led to increases in domestic transport-related costs, processed food, and utility prices.

More in this CVM Live story from Javine Mclean: