Kingston, Jamaica  – The Jamaica Manufacturers and Exporters Association(JMEA), the Private Sector Organisation of Jamaica (PSOJ), and the Jamaica Chamber of Commerce (JCC) applaud the Bank of Jamaica (BOJ) for its economic management, including the recent reduction in the policy interest rate to 6.25% and the maintenance of a stable exchange rate.

We, however, emphasize the urgent need for commercial banks to expedite the transmission of these rate cuts to borrowers and further monetary easing by the BOJ to stimulate economic growth.

The All-Jamaica Consumer Price Index (CPI) for November 2024, released by the Statistical Instituteof Jamaica (STATIN), reflects an inflation rate of 1.0% for the month, influenced mainly by a 2.1% rise in the ‘Food and Non-Alcoholic Beverages’ category, driven by higher prices for agricultural produce following Tropical Storm Rafael.

The point-to-point inflation rate (November 2023–November 2024) was 4.3%, comfortably within theBOJ’s target range of 4.0%–6.0%. Calendar year-to-date inflation as of November 2024 was 3.8%.

These trends affirm a stabilizing inflation environment, which provides room for further monetary easing to support economic recovery and growth.

Despite inflation stability, Jamaica’s economy faces significant challenges. STATIN data shows that the Goods Producing Industries grew modestly by 1.5% in Q2 2024, driven by agriculture, forestry,and manufacturing. However, sectors like construction are underperforming, highlighting the urgent need for accessible and affordable credit to facilitate recovery and expansion.

The BOJ has successfully preserved exchange rate stability despite external uncertainties, including geopolitical tensions and natural disasters. This stability creates a solid foundation for businesses to plan and invest with confidence. Coupled with a favorable inflation outlook and improving business sentiment, the environment is ripe for robust economic activity.

The JMEA, PSOJ, and JCC strongly urge the BOJ to continue lowering the policy interest rate to further stimulate the economy. While progress has been made, additional reductions are necessary to build business confidence and support critical investments in Jamaica’s productive sectors.

We also call on commercial banks to immediately reflect these rate reductions in their lending practices. This is essential to ensuring that the benefits of monetary policy are effectively transmitted to businesses and consumers. Micro, Small and Medium-sized enterprises (MSMEs), which are pivotal to Jamaica’s economic framework, require affordable financing to boost productivity, drive innovation, and create sustainable jobs.

To achieve these objectives, we recommend that the BOJ collaborate with the Bankers’ Association to address inefficiencies in the monetary transmission mechanism. Swift implementation of lending rate adjustments is vital to optimizing the intended impacts of monetary policy changes.

Jamaica cannot afford to revert to years of chronic poor economic growth. Our GDP per capita remains low compared to regional counterparts that continue to achieve higher growth rates. After making significant sacrifices to repair our macroeconomy—stabilizing inflation, reducing the debt to GDP ratio, and maintaining a stable exchange rate—Jamaica must now accelerate its growth trajectory.

Signs of business confidence are evident, with companies actively retooling and expanding to meet market demands. However, these efforts face challenges such as skill gaps in the labor market and limited access to affordable credit. To sustain and accelerate this momentum, proactive measures across all sectors of the economy are essential. Collaboration among all stakeholders is crucial to creating an environment that fosters sustained growth and economic resilience.

Jamaica has made great strides in stabilizing its macroeconomy, creating a strong foundation for accelerated growth. Now is the time for bold action. Commercial banks must immediately align with the BOJ’s policy direction by lowering lending rates and expanding access to credit, especially for MSMEs—the backbone of our economy. Affordable credit is critical to driving productivity, innovation, and job creation.

The JMEA, PSOJ, and JCC call on all stakeholders to act decisively. Together, we can foster an environment where businesses thrive, fuel economic expansion, and secure Jamaica’s path to sustainable growth and prosperity for all. The time to act is now.