Jamaica’s central bank left its policy interest rate unchanged at 5.50% at its August 2026 meeting, as persistent inflationary pressures and heightened geopolitical risks continued to weigh on the outlook. Headline inflation rose to 7.5% in July from 6.7% in June, remaining above the Bank of Jamaica’s target range, while core inflation picked up to 5.2% from 5.0%.
The BOJ expects inflation to stay above its target band through the September quarter before gradually moderating. Ongoing tensions in the Middle East and the escalation of the Russia-Ukraine conflict are projected to keep fuel prices elevated, driving up electricity, transportation and other related costs. Additional inflationary pressures could stem from increased fiscal spending on post–Hurricane Melissa reconstruction and from worsening drought conditions.
Nevertheless, a stable exchange rate and robust international reserves are expected to help limit imported inflation. The BOJ noted that inflation risks remain tilted to the upside and reiterated that it stands ready to adjust monetary policy if conditions warrant. Real GDP growth for FY2026/27 is projected in the range of 1% to 3%.
