BOJ says low productivity hindering fight against inflation

 

The Bank of Jamaica is again flagging low productivity as a major conflict in the fight against inflation.

 

From the latest Monetary Policy Committee meeting, BOJ Governor Richard Byles said "low factor" productivity needs to be addressed. 

 

"A highly productive economy produces goods and services at lower unit costs which dampens inflation. On the flip side, lower productivity means that goods and services will become relatively more expensive over time, which makes it more difficult to reduce inflation," he noted. 

 

"A significant part of the Consumer Price Index, the basket of goods and services that people buy, includes goods and services for which the prices are regulated by the government. These include PPV (public passenger vehicle) fares and utility rates. In this regard, regulated price adjustments, particularly when they are large and unpredictable, complicate the job of the central bank in containing inflation," Dr. Byles explained.