Jamaican Economy Maintains Strong Growth

February 27, 2023


For the third quarter of 2022, Jamaica’s economy outperformed the Bank of Jamaica (BOJ) projection with an outturn of 5.9% and continued to expand in the fourth quarter of 2022 and the first quarter of 2023 period, to date.

According to BOJ Governor, Richard Byles, domestic economic activity is anticipated to have reached pre-COVID-19 levels in the third quarter of 2022 and is anticipated to stay above those levels beyond the forecast horizon. Real GDP growth for the fiscal year 2022–2023 is anticipated to range between 4% and 5.5% with tourism, agricultural, and JAMALCO alumina plant resuming production as major contributors. Furthermore, projections reveal that inflation will continue to decline in 2023, with a rate of 8.1% in January 2023.

The Monetary Policy Committee (MPC) made the decision to preserve relative stability in the foreign exchange market, hold the policy interest rate at 7%, and maintain its stance in the money market. In order to ensure that the policy has the desired impact on inflation, the MPC is continuing its evaluation of the monetary transmission mechanism.

Additionally, the domestic and foreign Cash Reserve Requirement (CRR), applicable to deposit-taking institutions (DTIs), will increase by 1% as per the Bank’s MPC announcement on Monday, February 20. This increase will take effect on April 1, 2023 and will result in the CRR in domestic currency rising to 6%, while the equivalent in foreign currency will increase to 14%.

Notwithstanding, Jamaica still faces dangers like the ongoing crisis in Russia and Ukraine and the effect on commodities prices, but the increase in the CRR should aid in managing those risks.



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