KINGSTON, Jamaica, CMC – Governor of the Financial institution of Jamaica (BOJ), Richard Byles, is forecasting that inflation will stay low and secure over the subsequent two years.
Byles instructed reporters that headline inflation for July 2025, as reported by the Statistical Institute of Jamaica (STATIN), stood at 3.3 per cent, decrease than the determine recorded a 12 months earlier and beneath the BOJ’s goal vary of 4 to 6 per cent.
He mentioned inflation is predicted to stay low and beneath the goal vary over the approaching months, however is projected to step by step return to the 4 to 6 per cent hall throughout the subsequent two years.
Byles cited a number of short-term components together with the short-term influence of improved agricultural provides and quicker reductions in meals costs, following the sectoral shock in 2024; decrease electrical energy prices ensuing from the lower within the Common Consumption Tax (GCT) on electrical energy prices; and the waning results of earlier will increase in public transport fares, coupled with the absence of recent fare changes.
He mentioned the BOJ’s tasks solely have a marginal first-round influence on home costs ensuing from latest tariff changes by america.
“The general outlook assumes continued low imported inflation, notably on grains and oil, and secure inflation expectations.”
The BOJ Governor mentioned, consequent on the prevailing low inflation price being pushed by short-term components, it’s anticipated that the out-turn will ultimately return to the 4 to 6 per cent goal vary, as soon as the cumulative influence of those components subsides.
Towards the backdrop of low home inflation and international financial uncertainties, the BOJ’s Financial Coverage Committee (MPC) introduced its determination on Wednesday to keep up the coverage rate of interest at 5.75 per cent each year. The Committee additionally reaffirmed its dedication to preserving relative stability within the international alternate market.
The Central Financial institution said that its present financial coverage stance, together with the upkeep of the coverage rate of interest at 5.75 per cent each year, continues to help the containment of inflation throughout the 4 to 6 per cent goal vary over the subsequent two years.
Along with subdued home inflation, the BOJ’s August 20 announcement underscored continued financial growth, a surplus on the present account, and traditionally excessive international forex reserves, which stood at US$6.1 billion as of July 2025.
The BOJ inflation projection and financial coverage determination additionally thought-about uncertainties within the international financial system.
“The dangers to the inflation forecast for Jamaica are skewed to the upside, which signifies that inflation could possibly be reasonably greater than projected. Increased inflation might stem from a sharper-than-anticipated improve within the tariffs confronted by the US’s buying and selling companions, leading to greater imported inflation and elevated inflation expectations.
“As well as, inflation could possibly be greater than projected if there’s a additional escalation in geopolitical tensions, which might negatively influence worldwide provide chains,” Byles mentioned, including that decrease inflation might, nonetheless, end result from lower-than-projected worldwide commodity costs in addition to weaker demand situations.
Byles acknowledged that the financial outlook stays clouded by uncertainties surrounding US coverage shifts, notably because it recalibrates its commerce relationships and tightens immigration controls.
He mentioned these developments might dampen the tempo of worldwide financial exercise and contribute to inflationary pressures within the US, which might, in flip, pose draw back dangers to Jamaica’s progress prospects and exert upward stress on home costs.
Byles mentioned even with uncertainty and the potential headwinds within the international panorama, the Central Financial institution reaffirms its dedication to sustaining low and secure inflation at 4 to 6 per cent, and can deploy the instruments essential to protect worth stability.
