Jamaica’s inflation problem isn’t just about the damage left behind by Hurricane Melissa — it’s about how slowly the country is rebuilding.
That’s the warning coming from the Bank of Jamaica, which says delays in turning recovery money into actual repairs could push prices even higher across the economy.
Governor Richard Byles says close to US$1 billion has already been mobilised for recovery, with more expected from insurers and international lenders. The issue now isn’t finding the money — it’s spending it fast enough. When funds sit idle in planning and procurement, repairs stall, supply stays tight, and prices rise.
To fix that bottleneck, the Government has created the National Reconstruction and Resilience Authority (NARA), which reports directly to Prime Minister Andrew Holness and is meant to fast-track rebuilding approvals. But details are still being finalised, and the central bank says delays come with real economic costs.
The BOJ is already seeing early warning signs. Beyond higher food prices caused by storm-related agricultural losses, costs are rising for home repairs, construction services, personal services, and restaurant meals. These increases don’t stay isolated — they tend to spread, becoming part of everyday pricing across the economy.
With hurricane damage now estimated at US$8.8 billion, roughly 40% of Jamaica’s GDP, the central bank says the risk of inflation lasting longer than expected has grown. If rebuilding demand ramps up faster than supply can respond, especially in an import-dependent country, prices could remain elevated well into 2026 and beyond.
That’s why the BOJ has chosen to hold interest rates at 5.75%, resisting calls for rate cuts. While higher rates can’t fix broken roads or damaged homes, the bank believes they can help prevent inflation expectations from spiralling and higher prices from becoming permanent.
For most Jamaicans, this warning translates into a few hard realities:
- High prices may stick around longer, especially for repairs, rent, food, and services
- Loans and credit remain expensive, making rebuilding and household borrowing more difficult
- Lower-income households feel the pressure first, as food, utilities, and transport take up more of their income
- Careful budgeting becomes essential, as everyday costs rise before incomes do
The BOJ’s message is blunt: if inflation isn’t controlled now, everyone pays — but the most vulnerable pay the most.
Jamaica doesn’t just need recovery funding. It needs speed, execution, and coordination. Until rebuilding accelerates, inflation risks remain high, interest rates stay tight, and everyday families continue to feel the squeeze.