The Jamaica Manufacturers and Exporters Association, JMEA, says it strongly disagrees with the move by the Bank of Jamaica to increase interest rates.

The JMEA is warning that move by the BoJ puts the economy at risk for a recession. It says since last year, it has been urging the central bank not to increase the rates, but its warnings have been ignored.

According to the JMEA, the latest increase which took effect yesterday, has now seen a cumulative increase of 450 basis points since October of last year.

It says Jamaica still faces adverse conditions due to the Covid-19 pandemic, supply chain and logistics crises and now aggravated by the Ukraine-Russia war. It also says there is a greater level of uncertainty because of rising prices and increasing interest rates.

The JMEA cited inflation pressures in other leading global economies and said Jamaica is not alone. It says Jamaica is extremely vulnerable given the country’s economic dependence on these large economies and what it says are years of minimal growth.

The JMEA says it is extremely concerned that this tighter monetary policy stance presents a risk to Jamaica’s short to medium-term economic growth prospects. 

It says continued interest rate hikes does not facilitate business, but will only kill operations.