BOJ apologises for erroneous advice on JUTC fare reduction

The Bank of Jamaica (BOJ) has admitted it overestimated the impact the reductions in Jamaica Urban Transit Company (JUTC) bus fares would have on inflation.

In a statement released to the media on Friday afternoon, the BOJ said it takes full responsibility and apologises for its erroneous projection which led Minister of Finance Dr Nigel Clarke to announce a two-phase reduction in JUTC fares in November.

On Wednesday, BOJ Governor Richard Byles admitted that the two-phase reduction is now estimated to have an offsetting impact of only 0.2 per cent on annual inflation.

Last year November when the BOJ had advised Clarke on the matter, it estimated that the cumulative impact of increases in public passenger fares would contribute approximately two percentage points to annual inflation.

It was based on that projection that the BOJ advised Clarke of its estimate of required reductions in JUTC fares to cushion the impact of the public passenger fare increases on inflation. 

"Upon review, the Bank now recognises that it had overestimated the impact of the reductions in JUTC fares on inflation. Bank of Jamaica takes full responsibility and apologises for this error," it said.

Following the announcement by the finance minister of the temporary two-phase reduction in JUTC fares, the BOJ had projected that inflation would generally remain within the targeted 4 to 6 per cent range.

The BOJ now says it expects inflation will remain outside the target range until June 2025.   

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