Bank of Jamaica projects 2.5 – 4.5 percent growth for 2022/23

KINGSTON, Jamaica, (JIS) – The Bank of Jamaica (BOJ) is projecting 2022/23 fiscal year growth to be within the range of 2.5 percent and 4.5 percent. Governor, Richard Byles, says growth is also expected to range between one and three percent for 2023/24, speaking at the BOJ’s digital quarterly media briefing on Frida, August 19.

Noting that the economy continues to perform creditably, Byles cited signs of strong expansion in the April to June 2022 quarter, “and, so far, in the September 2022 quarter”.

The Governor said the labour market continues to perform exceptionally, noting that the April 2022 Labour Force Survey out-turns showed that the unemployment rate fell to a historic low of six percent.

Byles told journalists that the financial system remains resilient, pointing out that deposit-taking institutions’ (DTIs’) balance sheets have remained “adequately capitalised and in compliance with prudent liquidity standards”.

“The quality of the DTIs’ loan portfolio remained stable with a ratio of non-performing loans (NPLs) to gross loans marginally better than that recorded a year earlier,” he added.

Byles pointed out, however, that private-sector credit provided by DTIs has been growing but at a slower pace, reflecting the lagged effect of the pandemic and the effect of higher interest rates on credit demand, particularly from businesses.

He said the bank anticipates that growth will continue to be driven by the services industry, particularly tourism, “which has been recovering at a faster than anticipated pace”.

“There has also been some buoyancy in the agricultural sector, which is expected to continue as the tourism sector recovers and weather conditions remain favourable. The forecasted growth also reflects the recent resumption of production at the JAMALCO alumina plant,” he added.

The plant, which is based in Clarendon, was impacted by a fire in August 2021.

Byles said, however, that the risks to the growth forecast are skewed to the downside, suggesting the possibility of slower growth.

“Growth in tourist arrivals and related activities could be lower than projected, given strong headwinds to global growth from inflation, tighter financial conditions and geopolitical tensions. More severe weather in the context of climate change also poses a downside risk to GDP growth. Finally, there is a risk that domestic consumption could be adversely affected by the high, albeit falling, domestic inflation,” he stated.