Bank of Jamaica forecasts growth within the range of 2.5%-4.5%; Jamalco's alumina production taken into consideration

The Bank of Jamaica, the country's central bank located in Kingston, is projecting 2022/23 fiscal year growth to be between 2.5 per cent and 4.5 per cent.

While speaking at BOJ's digital quarterly briefing, Richard Byles, the Governor, said," Growth is also expected to range between one and three per cent for 2023/24.

The Governor added, "The economy continues to perform creditably and delivered signs of solid expansion in April to June 2022 quarter and so far, in the September 2022 quarter."

"The labour market continues to perform exceptionally, noting that the April 2022 Labour Force Survey out-turns showed that the unemployment rate fell to a historic low of six per cent."

Byles also stated that deposit-taking institutions' (DTIs') balance sheets remain well capitalized and in compliance with prudent liquidity standards. DTI's loan portfolio quality remained stable, with non-performing loans (NPLs) to gross loans marginally lower than last year.

Byles pointed out, however, that private-sector credit provided by DTIs has been growing but at a slower pace, reflecting the lagged effect of the pandemic and the effect of higher interest rates on credit demand, particularly from businesses.

The Governor of the BOJ exemplified that the bank foresees continuous growth and will be propelled by the services industry, especially tourism, which has been recovering faster than predicted.

Concurrently, he said, "There has also been some buoyancy in the agricultural sector, which is expected to continue as the tourism sector recovers and weather conditions remain favourable. The forecasted growth also reflects the recent resumption of production at the JAMALCO alumina plant."

The fire breakout at Jamalco alumina refinery in Clarendon in August 2021 affected approximately 50% of the powerhouse, which delivers power, steam and compressed air to the alumina refinery operations. It also reported that the refinery was making losses of around $500,000 per day.

Byles said that the risks to the growth forecast are skewed to the downside, suggesting the possibility of slower growth.