• by IPS Correspondents (kingston)
• Wednesday, December 28, 1994
• Inter Press Service

KINGSTON, Dic 28 (IPS) - Just days before the beginning of 1995, business leaders here are predicting that next year will be one of growth and an appreciation of the local currency.

"(1995) looks like it will be a year of expansion. Whether it will be expansion in investment consumption, that remains to be seen," says Charles Ross, Executive Director of the Private Sector Organisation of Jamaica (PSOJ).

"The new year looks promising," says Ivan Tomlinson, President of the Jamaica Agricultural Society.

Ross and others are predicting that in 1995 the country will see a decline in the inflation level and an appreciation of the exchange rate which has fluctuated between 30 and 33 Jamaican dollars to the U.S. dollar.

Tomlinson agrees. He says in 1995 interest rates which have gone as high as 65 percent this year should fall, and the Jamaican dollar should gain some strength against its U.S. counterpart.

Rex James, President of the Bankers Association of Jamaica says "the biggest threat to stability in 1994 was the inflation rate." But, he says, there is reason for hope, as the inflation rate was kept below one percent for the month of November.

James attributes the relative stability of the exchange rate which characterised 1994 to the "fine working relation" that exists between the financial sector and the Ministry of Finance.

He says during the year both parties matured in their appreciation of their interdependence.

"If we can keep it (inflation) below one percent, I can see supply of foreign exchange exceeding demand," says James.

And according to Philmore Ogle, President of the Jamaica Chamber of Commerce if interest rates do not drop precipitously, the rate of exchange should hold up during 1995.

In 1994, government's high interest-rate policy was accompanied by increased inflows of foreign currency which would otherwise have gone to the black market. Therefore foreign exchange was available to most persons, Ogle noted.

Ogle commends the government for its determination to avoid the printing of money to finance any deficit during the year.

He says some of the challenges which will face the country in 1995 will be its preparation for its role in the North American Free Trade Agreement (NAFTA) and the implications of the Uruguay Round of the General Agreement on Tariffs and Trade (GATT).

© Inter Press Service (2014) — All Rights Reserved. Original source: Inter Press Service

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