As we ease into 2023, the Jamaica Observer Business Desk harks back to 2022 and has compiled some noteworthy moments that made it the year it turned out to be.

1) BOJ raises interest rates to 11–year high – In response to inflation continuing to surpass its target range of four to six per cent, the Bank of Jamaica (BOJ) raised its policy rate from 2.50 per cent to 7.00 per cent which involved seven rate hikes. This action in conjunction with other measures to mop up liquidity was targeted at trying to push down demand and also assist in maintaining financial stability. The BOJ has deemed that its actions have assisted in keeping the economy from overheating and preventing a significant depreciation of the currency against the United States dollar where that country’s central bank has started to aggressively raise interest rates. While point-to-point inflation peaked at 11.8 per cent in April and steadily came down later in the year, point-to-point inflation trended back up with November at 10.3 per cent with core inflation at 8.8 per cent. Most deposit taking institutions hiked interest rates on existing customers and increased interest rates on new loans and other financial products with more hikes set to take effect in the first quarter of 2023. This is on top of increased banking fees which caused quite a stir at the start of the year. Although the BOJ has conditionally paused its rate hikes to observer the pass through effect of its rate hikes, the US Federal Reserve has indicated that it intends to continue hiking rates up to a possible 5.25 per cent which might force the BOJ’s hand again as it tries to maintain an interest rate differential that makes Jamaican Dollar options more attractive and limit the possibility of capital flight.

2) A mixed year for JSE – The Jamaica Stock Exchange (JSE) had a record year in terms of new listings and events as investor confidence continued to soar to new heights at the start of the year. Apart from Massy Holdings Limited’s historic $244-billion cross-listing in January, the JSE had six listings on the Junior Market which included the $4.72 billion oversubscription of Dolla Financial Services Limited and listing of the 100th actively listed company on the JSE through One on One Educational Services Limited. There was also Kingston Properties Limited’s additional public offering (APO) and Productive Business Solutions Limited’s preference share raise. The Junior Market Index also hit a new peak on May 9 with trading volumes and value exceeding 2019. However, the latter half of the year was less than stellar as trading activity started to trend down at the same time interest rates continued to rise and other fixed income options became more attractive. The JSE Index has continued to regress further with most of the market hitting new 52-week lows that includes prices hitting lows not seen in more than five years. The JSE’s own data feed came under pressure in September and December following new Junior Market listings with the former seeing a complete wipe out of trading information across the data users like brokers with client trading platforms and data management platforms unable to provide users with any information. Despite the decline in market activity, the JSE upgraded its website, got direct market access underway with the Toronto Stock Exchange and launched the Caribbean Business Exchange cable channel. Mayberry Investments Limited also launched its $5-billion public bond offering which should be listed on the JSE’s bond market and become the largest listing to date for that market.

3) FSC changes and international hurdles – The Financial Services Commission came under fire earlier this year for its proposed amendments to the guidelines for issuers of securities which would not only eliminate the one-minute initial public offering (IPO), but also the limitations to be placed on brokers and their clients from having reserved pools. The FSC has not provided an update to the Jamaica Observer, but someone in the industry mentioned that they are awaiting further engagement with the regulator which drew the ire of many securities dealers as well. Jamaica also made legislative amendments to ensure its no longer on the European Union’s (EU) grey list of non-cooperative jurisdictions for tax purposes. The country’s Finance Minister Dr Nigel Clarke has also been working on different amendments to ensure Jamaica is no longer on the Financial Action Task Force’s grey list with the Privy Council hearing the case with the Jamaica Bar Association on November 30.

4) New currency and banknotes – Jamaica saw the introduction of Jam-Dex which is the central bank digital currency (CBDC) issued by the BOJ. Only TFOB (2021) Limited has an approved digital wallet with $250 million issued into the local economy earlier this year as a government initiative to get the populace using the digital currency. The country also got a refreshed look for its currency with the introduction of polymer-based banknotes which not only included the images of former prime ministers and national heroes, but also the introduction of a $2,000 note. The notes are set to be available on a wide scale basis around the summer 2023.

5) Economic rebound – Jamaica effectively removed the major COVID-19 restrictions in March at a time when the country began to see a significant rebound in economic activity. The country has seen gross domestic product continue on an upwards path, airport passenger arrival numbers hit new records and the unemployment rate hitting a new historic low. The Government was able to not only implement a three-month electricity bill subsidy for consumers using less than 200 kWh, but also have a supplementary budget which included the new public sector compensation scheme. The country was also able to qualify for the International Monetary Fund’s Precautionary and Liquidity Line. While there continues to be fear in developed markets of a recession in 2023, Jamaica has managed to capitalise on fiscal prudence and reap the necessary dividends.