(CMC) – The Economic Programme Oversight Committee (EPOC) says it remains optimistic that the economic growth momentum in Jamaica will be sustained.
Figures released by the Statistical Institute of Jamaica (STATIN) data indicate that the economy grew by 2.2 per cent during the April to June quarter.
“As growth levels continue to rise quarter over quarter, we are hopeful that with an accommodative monetary policy enabling growth in credit to the private sector, the stimulus provided by the significant increase in capital expenditure (totalling J$24.4 billion (One Jamaica dollar=US$0.008 cents) at the end of August 2018), and an overall optimism for a stronger economy, as evidenced by both the business and consumer surveys, that this growth momentum will continue,” said EPCO co-chairman, Keith Duncan.
He told the EPOC’s quarterly media briefing that the prevailing monetary conditions in the domestic market, spurred by the Bank of Jamaica (BOJ) monetary policy, are increasingly accommodative and likely to drive higher-than-anticipated private-sector credit growth, which rose to 16 per cent in July.
Duncan said the bank’s decision earlier this month to hold the policy interest rate – offered on overnight placements with the Band of Jamaica (BOJ) – unchanged at two per cent, within the context of signs of an uptick in the rate of expansion in private-sector credit.
The decision also reflects the BOJ’s assessment that inflation, which is below its four to six per cent target but within the International Monetary Fund’s (IMF) 3.5 to 6.5 per cent programme mark, will be within the bank’s target range by the March 2019 quarter.
The bank, in a statement, indicated that increased economic activity is expected to support the return of inflation to the four to six per cent target “with greater certainty”.
Duncan noted that while external factors such as global oil prices, which are closing in on eight United States dollars per barrel, as well as tightening of United States monetary policies, could spur inflation, EPOC remains supportive of the BOJ’s accommodative monetary policy stance.