THE Bank of Jamaica (BOJ) said it is concerned about the potential destabilising effects of a tight labour market on its efforts to combat inflation, especially if wage increases being negotiated by various private sector entities are “substantial” or are not accompanied by increased productivity among the working population. The concern comes as the job market continues to show remarkable resilience despite a series of interest rate hikes to contain inflation, with official reports showing a historically low unemployment rate of 4.5 per cent, while the number of people working is at an all-time high.
Richard Byles, governor of the BOJ, speaking Monday at the central bank’s monetary policy briefing cited “higher-than-projected future wage adjustments in the context of the tight labour market” among a number of risks — including second-round effects from the agricultural price inflation, a worsening in supply chain conditions, and an unexpected rise in world oil prices — to its effort to bring inflation down to the target range of 4 per cent to 6 per cent by year end. The inflation rate has hovered around the top end of the range — approximately 6 per cent — for the last four months.
https://www.jamaicaobserver.com/business/boj-concern/
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