Statement on the Revised Impact of JUTC Fare Reduction on Inflation
In the context of the statement by Bank of Jamaica (BOJ) on the impact of the reduction in Jamaica Urban Transit Company (JUTC) fares at our Press Briefing on 22 February 2024, and subsequent public comments, the Bank wishes to advise on the sequence of events which led to this development in keeping with our commitment to full transparency.
In early November 2023 the Bank shared with the Minister of Finance and the Public Service, Hon. Nigel Clarke, its concern that inflation was projected to rise above the target range over an extended period, driven largely by the public passenger vehicle (PPV) fare increases announced by the Government on October 10, 2023 to take effect in October 2023 (19%) and April 2024 (16%). BOJ also shared with the Minister at that time, an estimate of the cumulative impact of the increases in PPV fares as contributing approximately two percentage points to annual inflation. The BOJ also advised the Minister of its estimate of required reductions in JUTC fares to cushion the impact of the announced PPV fare increases. Subsequently, on 21 November 2023, the Minister announced in Parliament the temporary two-phase reduction in JUTC fares to support BOJ’s inflation targeting mandate.
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.
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