BOJ unconcerned election spending will drive up inflation
/ Our Today
administrator
Durrant Pate/Contributor
The Bank of Jamaica (BOJ) is unconcerned that the massive sums being spent on election campaigning and administering the September 3 general election will trigger a demand-pull in inflation to the extent that it breaches its four to six per cent inflation target this year.
The Electoral Commission of Jamaica and the Electoral Office of Jamaica have been allocated almost J$2 billion to administer the general election, while the two major political parties have been spending millions each week on campaigning, which hit high gear in recent months. In addition, both traditional and social media in Jamaica have been inundated with political advertising costing millions of dollars.
When Out Today put the question to BOJ Governor Richard Byles as to whether this massive election spending would trigger a demand-pull in inflation, he was unperturbed.
“It certainly would be extra spending in the economy, what’s the extent of it, I don’t know,” Byles said while emphasising that it would take billions to impact inflation. “But I suspect that it will pass through and will only be temporary.”
Senior BOJ Deputy Governor, Dr Wayne Robinson, sought to bring some analysis in explaining the spending impact on inflation, noting, “You have to look at what’s happening in the overall fiscal performance; you can’t just look at one aspect. So far, for the first quarter (2025), the fiscal deficit is in line with budget. When we look ahead, the government will meet its fiscal target of a balanced budget for this fiscal year.
In conclusion, he said that there are no concerns at this point.
Comments