Macroeconomic Forecast Jamaica
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October 2011 | Macroeconomic Forecasts
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BMI View: Despite rising annual inflation, the Bank of Jamaica cut its policy rate for the second time in two months, from 6.5% to 6.25%, suggesting that, as global growth slows and tourism to Jamaica remains weak, the central bank has shifted to a growth rather than inflation bias. At this point, annual inflation remains within the central bank's 6.0-8.0% target range, but it has been rising steadily, from 6.9%y-o-y in April to 7.8% as of August. Monetary policymakers defended the cut by citing a positive trend in headline and core CPI as well as the future expectation of deflationary pressure caused by the slowing growth of international commodity and oil prices. However we believe that the central bank's growth bias will cause the country to miss its inflation target, and we are therefore happy to stick with our above-target inflation forecast for end-2011, at 9.0%.
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http://www.latinamericamonitor.com/f...t-jamaica.html
October 2011 | Macroeconomic Forecasts
Printable version Email Bookmark
BMI View: Despite rising annual inflation, the Bank of Jamaica cut its policy rate for the second time in two months, from 6.5% to 6.25%, suggesting that, as global growth slows and tourism to Jamaica remains weak, the central bank has shifted to a growth rather than inflation bias. At this point, annual inflation remains within the central bank's 6.0-8.0% target range, but it has been rising steadily, from 6.9%y-o-y in April to 7.8% as of August. Monetary policymakers defended the cut by citing a positive trend in headline and core CPI as well as the future expectation of deflationary pressure caused by the slowing growth of international commodity and oil prices. However we believe that the central bank's growth bias will cause the country to miss its inflation target, and we are therefore happy to stick with our above-target inflation forecast for end-2011, at 9.0%.
To read the full article, please choose one of the following options:
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