Inflation in Jamaica

A short history of inflation in Jamaica

The Commodity Spike (2008)

Jamaica's peak of 26.3% in the year to August 2008 came from the global food and fuel spike of that year landing on an economy with little resilience to it. Jamaica imports most of its food and all of its oil, and carried one of the heaviest public debt burdens in the world, which left the Jamaican dollar under near-permanent downward pressure and inflation persistently in double figures.

Debt Restructuring and Targeting (2013 onwards)

What followed is the more interesting part. Jamaica restructured its debt twice, ran sustained budget surpluses, brought debt down from around 145% of national income to under 75%, and in 2017 the Bank of Jamaica adopted an inflation target, accompanied by a public education campaign that included explaining monetary policy through reggae videos. Inflation has been far steadier since.

Post-Covid Inflation (2021 to 2023)

In Jamaica, prices rose fastest in April 2022, at 11.8%. The causes of the post-Covid inflation were global in nature, beginning with the lockdowns: factories and ports closed and the shipping between them fell out of sequence, so goods took longer to make and longer to arrive. Governments had spent heavily supporting household incomes through those closures, so when restrictions lifted there was money waiting to be spent and not enough on the shelves to spend it on. Then in February 2022 Russia invaded Ukraine, disrupting two of the world's largest suppliers of wheat, fertiliser, oil and gas at once, and the cost of everything grown, heated or transported rose with them.

Because the causes were shared, so was the timing: most countries peaked within a few months of one another in late 2022. The major inflation events covers this episode and the others in more detail.