Economy needs more stimulation – Stokes

One economist says the Bank of Jamaica (BoJ) should ease interest rates further to help boost the economy.

Dr. Adrian Stokes, economist at ScotiaDBG, says with the US Federal Reserves looking to reduce interest rates in that economy further to help create jobs, Jamaican monetary authorities should follow the lead.   

"They have been using interest rates so far, so what this dos is give them more room on the interest rates side to go down even further," he told RJR News.

He added that in lowering interest rates further, the aim is to encourage the productive sector to borrow to get create jobs.

"We have an economic problem of recession and in recessions what you do is look towards monetary policy to be as expansive as possible. The BoJ rate is trading around 8% and it still has room to go lower in that environment where the interest rate is one or zero percent in most other places," Dr. Stokes stated.