BOJ Projects Full Economic Recovery Within Two to Three Years After Hurricane Melissa

  • Governor of the Bank of Jamaica (BOJ), Richard Byles, indicated that the central bank now expects full economic recovery from Hurricane Melissa within two to three years, representing an improvement from the earlier projection of three to four years. Governor Byles explained that this more favourable outlook reflects expectations for a quicker rebound in agricultural output, alongside faster restoration of electricity and telecommunications services.
  • Speaking at the BOJ’s Quarterly Monetary Policy Report press conference on February 24, he noted that the central bank anticipates real GDP contraction of between 1% and 3% in FY2025/26, which is narrower than the Bank’s previous estimate. As reconstruction efforts advance and sectoral activity normalises, he added that real GDP growth is projected to recover to between 1% and 3% in FY2026/27.
  • On the external front, Byles stated that Jamaica’s current account balance is expected to deteriorate in the medium term, primarily due to hurricane-related disruptions to tourism and increased imports tied to infrastructure rebuilding and relief activities. However, stronger remittance inflows and insurance payouts are likely to partially offset this pressure. In this context, the BOJ projects the current account balance to range from a deficit of 0.5% of GDP to a surplus of 0.5% of GDP in FY2025/26, compared with a surplus of 3% of GDP in FY2024/25.
  • That said, Jamaica’s external buffers remain robust. The Governor reported that gross international reserves reached a historic high of US$6.8bn as at February 19, 2026, equivalent to approximately 155.8% of the adequacy benchmark, reinforcing the country’s resilience to external shocks.
  • Turning to financial stability, Governor Byles stated that the domestic financial system has demonstrated broad resilience following Hurricane Melissa, with deposit-taking institutions maintaining capital adequacy ratios above regulatory benchmarks. While asset quality showed some softening, the non-performing loan ratio increased modestly to 2.8% at end-2025 from 2.5% at end-2024, remaining well below the prudential threshold of 10%.
  • Private-sector credit growth remained stable, expanding by 8% in 2025, compared with 7.3% in 2024, suggesting continued lending support for economic recovery despite the post-hurricane environment.

(Source: JIS)