PIOJ rejects recession label as BOJ holds interest rate at 5.5%

The Planning Institute of Jamaica says Jamaica should not be treated as being in recession, even after the economy contracted for two straight quarters following Hurricane Melissa and continued weakness into early 2026.

The country recorded negative growth of 7.5 per cent for the October to December 2025 quarter, then a further 5.9 per cent decline for the period ending March 2026. James Stewart, senior director of economic planning, research and policy logistics at the PIOJ, said the economy is expected to improve as the effects of Melissa ease.

“We are thinking that there is no possibility of a recession,” Stewart said, adding that STATIN’s seasonally adjusted quarter-on-quarter data is expected to show growth in each succeeding period as conditions improve.

The Bank of Jamaica also reported that demand for United States currency was far above supply in its latest B-FXITT standard intervention operation. The central bank offered US$30 million for settlement on Friday after applications opened Thursday, but received 49 eligible bids valued at US$78.65 million. Twenty-one bids were accepted, with the full US$30 million allocated at a settlement price of J$157.14 to US$1.

The BOJ kept its policy interest rate at 5.5 per cent per annum, citing an uncertain inflation outlook and rising international commodity prices, especially crude oil. It also pointed to shipping disruptions linked to tensions around the Strait of Hormuz and military activity involving US and Iranian forces.

Market activity for May 21 was led by Kent Tire Holdings Jamaica Limited, TransJamaica Highway Limited and Omni Industries Limited. The report said trading interest remained concentrated in transportation and distribution stocks, while foreign exchange activity stayed strong across major currencies.