The Bank of Jamaica Projects Partial Rebound In Growth In 2021/22

Jamaica: The Bank of Jamaica (BOJ) is projecting a partial rebound in the economic growth of about three per cent, in the aftereffect of the coronavirus (COVID-19) pandemic, commencing in the fiscal year 2021/22.

Governor, Richard Byles, says the out-turn could probably be as high as eight per cent if there is a strong recovery in tourism”.

Mr Byles stated at the Central Bank’s quarterly briefing in downtown Kingston . that the Jamaican economy is not expecting to return to pre-COVID-19 levels before at least the fiscal year 2022/23.

Mr Byles also said the Statistical Institute of Jamaica’s (STATIN) June 2020 quarter growth out-turn, showing an 18.4 per cent contraction in domestic economic activity, was a “sobering” indication of the amount of the pandemic’s result on the country.

He said the effect was also visible in employment, noting that STATIN’s labour market study showed that roughly 12.6 per cent of the labour force was unoccupied as at July 2020, up from 7.8 per cent the last year.

Nonetheless, our latest projection for the end of fiscal year 2020/21 is for real economic activity to contract in the range of 10 to the 12 per cent, slightly more than our previous prediction of seven to 10 per cent,” the Governor told journalists.

Mr Byles said despite the fallout in economic activity due to COVID-19, the financial system has remained rebounding throughout the pandemic.

He advised that the BOJ’s regular assessment of deposit-taking institutions’ (DTIs’) balance sheets indicates that they are “more than adequately” capitalised and in agreement with prudent liquidity standards.

“Loan quality for the system, while naturally showing a small deterioration, remains well below [the danger] threshold. Specifically, the ratio of non-performing loans to total loans increased to 2.8 per cent in September 2020, compared with 2.4 per cent in September 2019, well below the benchmark of 10 per cent,” the Governor outlined.

In this regard, Mr Byles said Jamaica’s reserves remain “healthy”, with net international reserves at the end of October totalling approximately US$2.9 billion.