On the surface, Jamaica’s economy is dressed for celebration. Inflation sits at its lowest in years, foreign reserves are overflowing, and the dollar isn’t misbehaving. But inside boardrooms and finance departments, a different economy exists — one defined not by numbers, but by memory.
Executives aren’t convinced. They look at calm prices today and still plan for turbulence tomorrow. They anticipate higher costs, weaker currency, and inflation climbing back above safe limits. In their eyes, the past is never really past — the crises of yesterday cast long shadows.
The Economics of Distrust
Trust in money is fragile, especially in small economies. Even when inflation cools, businesses recall the days of double-digit spikes and policy whiplash. That memory doesn’t fade because a monthly report says “all clear.”
This explains why companies are still pricing in stock replacements and utilities as if storms are coming, not gone. They’re not reacting to the data — they’re reacting to history. For them, the real risk is not what the Bank of Jamaica reports today, but what could suddenly unravel tomorrow.
Dollarisation as a Signal
One of the clearest tells is how Jamaicans save. More deposits are being held in US dollars, a classic hedge against instability. It’s not that the local currency is collapsing — it’s that households and firms don’t want to take the chance.
Every uptick in dollarisation is less about math and more about mood. It’s insurance, a way of saying: we’ve seen this movie before, and we don’t trust the ending.
Central Banking’s Invisible Battle
Central banks are used to fighting numbers — inflation rates, GDP growth, reserve balances. But the harder war is invisible: the war against fear.
Policy rates can hold steady, interventions can smooth volatility, but none of that guarantees belief. When businesses and consumers act as though inflation is coming back, they can create the very thing they fear. Expectations harden into wage negotiations, purchasing contracts, and pricing strategies — until the numbers bend toward the narrative.
The Real Test Ahead
Jamaica’s monetary health is stronger than many of its peers. But success will not be judged by a CPI print. It will be judged by whether executives stop stockpiling against ghosts, whether families trust the local dollar again, and whether the fear economy slowly yields to the official one.
Until then, the gap between perception and reality will remain the central bank’s most dangerous statistic — one that can’t be found in any table, but in the collective psyche of the nation.
