Which Inflation Rate Does BOJ Target?

  • In STATIN’s recent December 2020 inflation report, it was noted that, for the calendar year 2020, the inflation rate was 6.4%. The same release also noted that the point-to-point inflation rate as of December 2020 was 5.2%.
  • The difference between the two numbers reflected the timing of shocks that affected the CPI during 2020. In addition, these differences have resulted in some confusion as to whether the Bank of Jamaica (BOJ) was successful in meeting its inflation target of 4.0% to 6.0% in December 2020.
  • The inflation measure by which BOJ’s performance should be judged is the annual point-to-point as of December and not the calendar year or any other measure.
  • This measure is stated in the soon-to-be gazetted law amending the Bank of Jamaica Act, which was passed by the both Houses of Parliament in December 2020.

(Source: JIS News)