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JMEA warns continued increases in BOJ's interest rate could damage economy

The Jamaica Manufacturers and Exporters Association (JMEA) is warning that continued increases in the Bank of Jamaica's policy interest rate could damage the "fragile" economy.
 
It says the massive increase is already causing a rise in lending rates.
 
The JMEA further explains that increases in existing loans hurt consumers, workers and small business owners who are already burdened by price increases.
 
It says the increases in interest rates will have a significant negative effect on the construction industry, with the full impact to be seen late this year into 2023 when current projects are completed, and new ones dry up.
 
The JMEA argues there is no need for further increases in the policy rate as the monthly inflation rate has been on a declining trend since December 2021. 
 
It states that the total inflation rate for the last six months was four per cent which annualises to eight per cent. 
 
The JMEA notes that this is a significant reduction from the 11.8 per cent at its highest point and suggests further reductions based on the results for April and May.
 
The Bank of Jamaica on Wednesday increased the policy interest rate to 5.5 per cent


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