I regret the way that my comments in the article “BOJ Inflation Policy Trashed” were published in

the Jamaica Observer of 21st July. I apologise to all concerned for the

misunderstanding that my incomplete and incorrect comments may have caused.

In order to clarify my comments on the above subject I submit the following:

1.Targeting any performance in field means that one wants to achieve the

targeted level of performance and is prepared to put in the efforts and the

resources to do so.The target should be achievable with the efforts and

available resources.One should be able to control and influence the variables which

determine the outcome .

2. Inflation in a country is the outcome of many variables including global

energy prices, global prices of food and many other commodities,level of growth,level of production and productivity, pricing power of suppliers , level of supply of various goods and services, trade barriers and tariffs, taxes and

several other factors.

3. In an import dependent economy like Jamaica, factors which influence the

inflation outcome include tourism earnings, bauxite and aluminum prices, energy

prices, food prices,level of remittances, level of tariffs and taxes,level of

competition, level of agricultural production, exchange rates of various

currencies, level of inflation in other countries particularly trading

partners,level of employment, level of incomes, global growth, natural disasters, and so on.These and

several other factors affect the level of inflation.

4. Since we do not have much control or influence on most of the variables that

affect the level of inflation and the global highly uncertain current economic

environment , we cannot accurately predict the future behaviour of these

variables.Hence it will be difficult for us to accurately

target inflation levels for future years.Perhaps one can try to do it for a

year at a time and make efforts to achieve it with some success .But I wonder

how much reliance can be placed on targets for several future years.

5. I wish that life was so simple that we could target inflation levels for

future years and achieve them!

6. This is my present understanding of the subject. I prepared to learn from

anybody who can enlighten me further and then I can change my views.