JAMAICAN Economy Remains Buoyant Says BOJ Governor

KINGSTON, Jamaica, February 22, 2023 - JIS - Bank of Jamaica (BOJ) Governor, Richard Byles, has projected that the country's  real gross domestic product (GDP), will grow by two to three per cent for the financial year 2024/25, and between one and two per cent over the medium term.” 

Speaking during the Central Bank’s semi-virtual Quarterly Monetary Policy Report Press Conference at the BOJ in downtown Kingston on Wednesday, Mr. Byles noted that despite the impact of bouts of adverse weather on the agricultural sector, real GDP for the December 2023 quarter is estimated to have grown within the range of one to three per cent.

Explaining that real GDP is that which is the total value added generated from economic activity the BOJ Govertnor explained that “there are signs that the economy continued to expand in the March 2024 quarter. This continued economic buoyancy is mirrored in the decline in the unemployment rate to a new record low of 4.2 per cent at October 2023,” Mr. Byles stated.

Supported by anecdotal information about wage adjustments in selected private-sector industries, Mr. Byles stated that the data on unemployment is indicating that the domestic labour market remains tight.

“We have seen strong job growths in a wide cross-section of the economy. But it has been more pronounced in sectors such as tourism, real estate, and other business services, which tracks the progress of the business process outsourcing (BPO) sectors, among others, the distributive trade, transport sector and construction,” the BOJ Governor said.

“When compared with the growth in the value added of the economy and real GDP, the strong growth in employment suggests that the productivity of labour continues to decline,” he added.

Mr. Byles further stated that combined with the real wage adjustments that have occurred recently, this fall in productivity continues to be of some concern.

 He said he foreign exchange market remains relatively stable, reflecting continued strong tourism revenue and remittance inflows, as well as the effect of actions taken by the Bank of Jamaica (BOJ).

“To prevent undue volatility in the foreign exchange market, BOJ has sold approximately US$907 million via its B-FXITT (BOJ-Foreign Exchange Intervention Trading Tool) facility over the last 12 months, ending January 2024,” he stated.

“When these sales are set against BOJ purchases, however, the result is that the Bank net purchased approximately US$1.3 billion over that same period,” the Governor added.

In the context of the exchange rate’s stability, Mr. Byles informed that the general downward trend in dollarisation has continued, with individuals and businesses reflecting an increased preference to hold Jamaican-dollar assets in deposit-taking institutions (DTIs).