Inflation in Jamaica has remained largely steady and has remained in the 4 per cent to 6 per cent band.

Hurricane Beryl on July 3, 2024, and the subsequent heavy rains have impacted the economy.

In light of the favourable macroeconomic outlook in Jamaica, Bank of Jamaica (BOJ) has maintained the policy rate at 6.00 per cent per annum and preserved relative stability in the foreign exchange market.

Speaking at the Bank of Jamaica’s Quarterly Monetary Policy Report Press Conference Monday morning at its Nethersole Place headquarters in downtown Kingston, Governor Richard Byles drew attention to the sources of inflation in Jamaica moderating.

Explaining the BOJ’s assessment of the country’s inflationary situation, Governor Byles said: “First, the private sector’s expectations of future inflation, a key driver of headline inflation, continues to fall. In the Bank’s December 2024 survey of businesses’ inflation expectations, which was conducted over the period 25 November to 21 December 2024, respondents lowered their expectations for inflation 12 months ahead by more than one percentage point. This represents a continuation of a downward trend observed since the middle of 2022.”

He added: “The second factor supporting lower inflation is the recent positive developments in the prices of imported intermediate and final goods. Let me explain. The average price of grains (including wheat, corn and soybeans) for the December 2024 quarter was lower by approximately 15.1 per cent when compared to the December 2023 quarter. In addition, average oil prices for the December 2024 quarter were lower relative to the previous year and are projected to increase only marginally over the next two years. Inflation in the United States which directly affects the prices of consumer items imported by Jamaicans decelerated to 2.9 per cent at December 2024 from 3.4 per cent a year earlier. On the other hand, shipping prices increased for the review quarter relative to the corresponding quarter of the previous year.

“Thirdly, both the change in the exchange rate and businesses’ expectations about its pace of depreciation in the future, have remained relatively stable. At the 19th of February 2025, the exchange rate, notwithstanding some two-way movement had depreciated by just 0.3 per cent when compared with the rate on the 19th of February 2024. This is a slower pace when compared to the 1.9 per cent depreciation for the same period a year earlier.

“The foreign exchange market has been adequately supported by the Bank’s use of its healthy reserves to augment flows in the market. BOJ sold US$1.1 billion via its B-FXITT facility over the 12 months to end January 2025, compared to the sale of US$897 million over the 12 months to end January 2024. However, it is important to note that the Bank net purchased approximately US$1.1 billion over the 12-month period to January 2025.

“Fourthly, the deceleration in headline inflation reflected the impact of no upward adjustments in regulated prices (such as transportation fares). Finally, while employment levels remain high, anecdotal data suggest that wage pressures are moderating.”