Durrant Pate/ Contributor

The Bank of Jamaica (BOJ) is projecting that the Jamaican economy is set to grow during the September quarter, based on preliminary indicators.

The preliminary indicators suggest that the economy should expand, driven by increases in electricity & water supply, agriculture, and tourism, as well as their allied services. Thereafter, the BOJ projects that “economic activity is anticipated to strengthen throughout FY2025/26. In this context, real gross domestic product (GDP) is projected to recover in FY2025/26 in the range of 1.0 to 3.0 per cent, largely due to growth in the Agriculture, Mining, and Tourism sectors.”

Economic indicators continue to point to a stable macroeconomic environment with stable domestic interest rates, with the decline in interest rates abroad, improving the differential between domestic and external rates, which should better support stability in the foreign exchange market. In addition, the current account of Jamaica’s balance of payments is projected to remain in surplus over the near term, and the international reserves are healthy and are projected to improve further.

Good news for the productive sector

There is also good news for the productive sector based on the outturns for selected external indicators, including oil, grains, and liquefied natural gas (LNG) prices declining. The average of daily West Texas Intermediate (WTI) crude oil prices for July and August 2025 declined by 2.7 per cent, a larger decline than the BOJ’s forecast. 

Prices declined further in September 2025 to date, reflecting OPEC+’s decision to increase its crude oil production in October 2025 along with signs of weakening demand amid a moderation in American employment. For LNG, average prices for July and August 2025 declined by 11.2 per cent, relative to the projection for a smaller decline over the period. 

This is supported by a build-up in American inventories. Average grain prices (wheat, corn and soybean) declined for July and August 2025 by 1.9 per cent, compared with the BOJ’s projection for a smaller decline for the period. International fertiliser prices, on average, increased by 6.3 per cent over July and August 2025.

The BOJ is reporting that the “domestic banking system remains sound with adequate capital and liquidity”, noting that “the domestic fiscal policy stance continues to pose no risk to inflation over the near term.”

Also, the BOJ’s July 2025 survey of businesses’ inflation expectations indicated that respondents expected inflation 12 months ahead to be 7.0 per cent, generally stable relative to 7.1 per cent in the previous survey.