BOJ Projects Gradual Recovery of Economy

  • The Bank of Jamaica (BOJ) is projecting a gradual recovery of the economy for financial years 2026/27 and 2027/28, with real gross domestic product (GDP) growth forecast to be within the range of 1.0% to 3.0%. This forecast is consistent with the Planning Institute of Jamaica's growth, as all industries are expected to expand as the economy recovers from the 2025 weather-related shocks.
  • The forecast was given by Governor Richard Byles during the Quarterly Monetary Policy Press Conference at the Garden Hotel in Mandeville, Manchester, on Tuesday (May 26). The Governor noted that real GDP is also projected to grow at an average of 1.0% to 2.0% per cent over the medium term.
  • Additionally, it was communicated that Jamaica’s Gross International Reserves remain robust, at US$6.5 Bn as at May 19, 2026 – representing about 139.6% of the sum considered adequate. “Going forward, Jamaica’s foreign reserve levels are expected to remain adequate over the medium term and will support the orderly functioning of the foreign exchange market, helping to limit volatility and thereby containing imported inflation,” he outlined. The Governor emphasised that the domestic financial system remains sound with adequate capital and liquidity.
  • Meanwhile, Governor Byles noted that despite the temporary fall-off in tourism earnings, so far, the foreign exchange market has remained relatively stable. He also highlighted that this stability occurred in the context of the Bank’s continued actions to reduce volatility in the foreign exchange market, as part of its strategy to lower inflation expectations and contain inflation within the target range. He stated that the BOJ sold US$1.3Bn through its B-FXITT facility in the 12 months ending April 2026. This was up from US$1.1Bn in the previous period. Despite this, the Bank purchased US$906.4Bn more than it sold.
  • Finally, he also noted that geopolitical tensions and the impact of Hurricane Melissa are expected to weaken the country’s external accounts, driven by higher fuel costs, increased reconstruction-related imports, and setbacks in the tourism sector. As a result, the Central Bank projects the current account balance for 2025/26 to range from a deficit of 0.5% of GDP to a surplus of 0.5%, compared with a surplus of 3% in 2024/25.

(Sources: JSE & NCBCM Research)