In a September 30, 2026 article, Prof Andre Haughton examines the Bank of Jamaica's decision to increase its policy interest rate to 6.0%, effective September 29, as part of efforts to curb inflation, which had risen to 7.9%.
The article highlights that while Jamaicans are saving more, the return on those savings is still being outpaced by inflation, resulting in negative real interest rates. At the same time, lending to businesses has slowed significantly, while household borrowing has increased. Haughton argues that this trend could hamper Jamaica’s post-hurricane recovery because business investment and access to credit are critical for expanding production and rebuilding the economy.
He suggests that alongside monetary policy, the government should support economic recovery by improving access to collateral-based lending, reducing reconstruction bottlenecks, and expanding credit guarantee programmes to encourage lending to viable businesses.
