The Bank of Jamaica (BoJ) says the country’s real Gross Domestic
Product (GDP) is expected to increase in the range of 1.0 per cent to
2.0 per cent for the March 2012 quarter, largely driven by growth in
agriculture, forestry and fishing; electricity and water supply; hotel
and restaurants; and construction and installation.
The Central Bank is also forecasting that domestic inflation, as
measured by the change in the consumer price index (CPI), will be in the
range of 1.0 per cent to 2.0 per cent in the March 2012 quarter.
Presenting the Quarterly Monetary Policy Report on February 20,
Governor of the Bank of Jamaica (BOJ), Brian Wynter, explained that
“underpinning the outlook is the forecast for a decline in imported
inflation, supported by relative stability in the exchange rate."
He further noted that in addition, “inflation expectations and domestic
capacity conditions” are expected to be relatively stable.
“The inflation rate for January, as reported by the Statistical
Institute of Jamaica (STATIN), was 0.4 per cent, similar to the rate in
the previous two months. This outturn is in line with the Bank’s
expectations for the month as well as the 1.0 per cent to 2.0 per cent
forecast for the March 2012 quarter. Given the projection for the March
2012 quarter, the Bank has maintained its forecast for inflation in the
target range of 6.0 per cent to 8.0 per cent for the 2011/12 financial
year,” he stated.
The Central Bank Governor advised that the Bank’s projection is
supported by the results of the bank’s Inflation Expectations Survey,
which is undertaken quarterly by STATIN.
“In particular, the survey undertaken in the December 2011 quarter
indicated that the level of inflation expectations has remained fairly
stable since the March 2011 quarter. In addition, respondents’
expectations of future depreciation in the exchange rate were largely
consistent with the movement over the past year. These responses are
encouraging as we gradually move towards an inflation targeting
framework,” the Governor said.
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