Jamaican firms nudged up their inflation expectations in December, even as they saw a slower pace of currency depreciation and mixed signals on business conditions, according to the Bank of Jamaica’s (BOJ) latest survey.
Respondents projected point-to-point inflation to rise to 6.8 per cent over 12 months to December 2026, up from 6.2 per cent in the previous survey.
“The perception of inflation control was generally stable in the December 2025 survey relative to the November 2025 survey,” stated the report, which added that perceptions of stability carry over to the currecny market. “Respondents forecasted the exchange rate to depreciate over all three time horizons at a relatively slower pace, compared to the previous survey.”
The survey was conducted between December 1 last year and January 15 this year by the Statistical Institute of Jamaica (STATIN) on behalf of the central bank. There were 333 respondents capturing the perception of CEOs, managing directors and financial controllers about the future movement of prices, and current and future business conditions.
Operating costs remain a concern. Firms expect the steepest increases over the next year from stock replacement, followed by utilities and raw materials. Wages and salaries are seen rising the least.
Currency expectations eased. Respondents forecast the Jamaican dollar to depreciate by 0.6 per cent over three months, 1.0 per cent over six months, and 1.2 per cent over 12 months – all slower than the November survey’s projections of 1.0, 1.1 and 1.7 per cent.
Interest rate expectations ticked higher. Businesses see the 90-day Treasury bill rate at 6.1 per cent three months ahead, above the December outturn of 5.1 per cent. Fewer respondents – 45 per cent versus 55 per cent in November – expect the BOJ’s policy rate to remain unchanged at 5.75 per cent, with more anticipating marginal increases or decreases.
Business sentiment was split. The Present Business Conditions Index fell to 79.6 from 110.5, while the Future Business Conditions Index climbed to 115.6 from 97.8, reflecting optimism about recovery.
Luke.douglas@gleanerjm.com
