The Jamaican dollar won’t slide
much in 2011 but the ‘lacklustre’ economy will, according to a United Nations
report released this month.
The exchange rate will dip in line
with US inflation losing at worst three per cent or about J$2.50 to close at
J$88.09/US$1, according to analysis by the Economic Commission for Latin
America and the Caribbean (ECLAC), which is one of five regional commissions of
the United Nations Economic and Social Council.
The forecast follows an
appreciation to around J$85 to US$1 in the months leading up to October,
reflecting, according to ECLAC, an improvement in the current account, policy
interventions and improved investor confidence. The exchange rate is expected
to stabilise given the confidence springing from the International Monetary
Fund (IMF) programme, the report said.
“At worst, with the increase
in imports and other sources of currency demand, the currency could sustain a
modest nominal depreciation to stand at J$87.06 to US$1 by the end of 2010 and
J$88.09 to US$1 by the end of 2011,” stated ECLAC in its chapter on
Jamaica for the publication entitled Preliminary Overview of the Economies of
Latin America and the Caribbean 2010.
The reggae island, however, will
grow this year between negative 0.5 and 0.5 per cent, compared with average
regional growth of six per cent, according to ECLAC, which tracks regional
growth as an indicator of development.
“Despite substantial inflows
under a 27-month stand-by agreement with the IMF, Jamaica’s economic
performance will remain lacklustre in fiscal year 2010/2011,” added ECLAC.
The countries with the highest
regional growth over 2010 and 2011 respectively include:
* Paraguay 9.7 and 4.0 per cent;
* Uraguay 9.0 and 5.0 per cent;
* Peru at 8.6 and 6.0 per cent;
* Argentina at 8.4 and 4.8 per
* Brazil at 7.7 and 4.6 per cent;
* Dominica Republic at 7.0 and 5.0