BOJ Sees Stronger Jamaican Growth in 2027/28 but Inflation Risks Remain

Bank of Jamaica Governor Dr. Brian Langrin says reconstruction and easing constraints in agriculture, tourism and mining should support stronger growth, while inflation remains above the central bank’s target.

KINGSTON, Jamaica — Jamaica’s economic growth is expected to strengthen in the 2027/28 fiscal year as reconstruction gathers pace and constraints affecting major productive sectors ease, according to Bank of Jamaica Governor Dr. Brian Langrin.

The outlook comes as the central bank also confronts inflation above its target range, highlighting the balance policymakers face between supporting recovery and maintaining price stability.

Growth Expected to Strengthen

Langrin said economic activity should improve as constraints affecting agriculture, tourism and mining ease and reconstruction activity provides additional support.

The forecast points toward a stronger 2027/28 performance following a period in which Jamaica’s economy has faced disruptions affecting production and other areas of activity.

Inflation Above BOJ Target

The stronger medium-term growth outlook comes against elevated near-term inflation.

Inflation reached 7.9 per cent in August, above the Bank of Jamaica’s target range of four to six per cent.

The central bank raised its policy interest rate by 50 basis points, from 5.5 per cent to six per cent, as it responds to inflation pressures.

Among the factors contributing to inflation are conditions affecting agriculture, energy and transportation costs, as well as demand associated with rebuilding.

Foreign Reserves Remain Strong

Jamaica’s gross international reserves stood at US$6.6 billion at the end of August, according to the central bank.

The reserves represented 143.9 per cent of the Bank’s adequacy measure, providing a significant external buffer as Jamaica navigates inflation and the economic recovery.

As of September 24, the Jamaican dollar had appreciated by 1.1 per cent year over year, according to the economic update.

Recovery With Price Risks

The combination of stronger expected growth and above-target inflation creates a complicated policy environment.

Reconstruction can support economic activity and employment, but rebuilding-related demand can also add to price pressures when supplies and productive capacity are constrained.

The BOJ’s outlook therefore points to an economy expected to strengthen while monetary policy remains focused on returning inflation toward the four-to-six-per-cent target range.

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