Governor of the Bank of Jamaica, Richard Byles, does not foresee a recession in Jamaica’s near future.
The governor was addressing the quarterly media briefing earlier this week after growing concerns from the private sector that the central bank’s aggressive actions in hiking interest rates could hurt the economy.
He made it clear the country still has a great deal of growth capacity to exploit before any concerns could materialise.
Chevon Campbell tells us more.
The BOJ Governor doesn’t believe the actions taken by the bank to manage inflation would hurt the country’s growth trajectory.
He says tourism alone has significant room to expand utilising only 70 per cent of its current capacity.
The central bank has raised interest rates by 450 basis points since august of last year. This is in response to inflation which has gone up over the last nine consecutive quarters to stand just shy of 12 per cent.
This is well above the 4 to 6 per cent target range the BOJ is charged with maintaining. It’s not projected to fall back in line until June of next year.
Governor Byles says despite the actions taken by the central bank the country should easily see 7 to 10 per cent growth for the fiscal year just ended March.
However, Byles says he recognises that the central bank must strike a delicate balance in its approach in order to avoid undue risks.
Meanwhile, Deputy Governor, Wayne Robinson, while noting that significant head winds to growth do exist, he believes the Bank of Jamaica has properly made accommodations for them in its growth forecast.
Vice President of the Private Sector Organisation of Jamaica, Dr. Adrian Stokes, is questioning the confidence of the central bank that a recession is not possible in Jamaica’s foreseeable future.
He says actions taken by the Bank has increased the probability of the economy slipping into a recession.
Dr. Stokes noted that the BOJ has also remained coy with the neutral rate.
He says this uncertainty is the reason financial institutions are reluctant to provide loans.
Dr. Stokes says the bank should be concerned about a material decline in the global markets.
Dr. Adrian Stokes, Vice President of the PSOJ and Chairman of it’s Economic Policy Committee.
Abigail Bartley contributed to this report.