High inflation enemy of the people, says finance minister
With Jamaica’s inflation rate on a downward trend since 2013, Finance Minister Dr Nigel Clarke said that the modernisation of the Bank of Jamaica (BOJ) is critical to maintaining a low and stable inflation rate. “When you have inflation that is low, that is stable, and that is predictable, people begin to plan for the long term. The incentive to save goes up because the value of your savings will be maintained over time. And, therefore, it results in a much healthier economy,” Clarke said while participating in the Financial Gleaner/ Jamaica News Network business forum ‘The Exchange’ on Wednesday.
In the past, the finance minister was able to dictate to the BOJ on fiscal policy, but Clarke told the forum that such power must be relinquished to facilitate long-term benefits.
“My interest as minister of finance is in the long-term viability and prosperity of the Jamaican people. What we gain from it (central bank modernisation) is significant in comparison to what you described as the levers that I would give up as minister of finance,” Clarke said.
The minister lamented that the inflation rate has been as high as 82 per cent per annum in the past and that a consistently high inflation rate has indisputably been to the detriment of the people.
INFLATION IS NUMBERONE ISSUE
“We can remember, and those who are too young to remember, you can imagine, how that destroyed lives. People who retired at the top of their game due to no fault of their own, within a few years, their pension would be reduced to nothing because of inflation. They couldn’t even pay their light bills. We know from our experience that high inflation is the enemy of the Jamaican people,” said Clarke.
BOJ Governor Brian Wynter, who also participated in the forum, shared similar sentiments, citing that the modernisation of the central bank is necessary to support the economy.
“We have to recognise that in order to adequately support this transformed economy, one of the elements that is important would be, as we come to the end of it (reform), that we are collectively satisfied that they are modern and appropriate for what we are trying to do. And in that respect, the issue, we would all agree is number one for the central bank, is inflation,” Wynter said.