Business: Inflation could move down to single digits

Steven Jackson, Business Reporter

The Bank of Jamaica (BOJ) has tempered the country’s inflation target saying it could possibly hit single-digits.

This was hinted at by BOJ Governor Brian Wynter as he addressed a Jamaica Securities Dealers Association event yesterday.

Wynter refrained from officially revising the central bank’s double-digit forecast it made in June.

However, he did indicate that the central bank has tempered its target because of the weak external and domestic economy so far in the September quarter.

The BOJ Governor reasoned that inflation for the September quarter could be similar to that of the July quarter, which was in the range of 1.0 to 2.0 per cent.

In June, the bank revised its inflation forecast from 6.0 to 8.0 per cent towards double-digit levels due to the effect of new budgetary tax measures.

However, Wynter said the tax impact was lower than anticipated because of the weak economy.

Inflation for the first four months of the year hit 1.1 per cent compared to the 2.8 per cent recorded in 2011.

However, the BOJ governor said risks for higher inflation could follow due to higher than projected grain price increases, hurricanes and hikes in the cost of crude oil.

steven.jackson@gleanerjm.com