the uncertainties unleashed on the global economy in the form of highly volatile and rising commodity prices will make a repeat of the extent of last year ’ s success all but impossible. but we will be striving for a meaningful reduction all the same, a reduction that is aimed at taking us decisively along the path towards our longer term goal for jamaica, which is the average inflation rate of our major trading partners ( currently about 4 per cent ). we are also expecting that, with lower inflation and interest rates and an abundance of credit resources in the economy, there will be a smooth handover of the growth driver from state - led spending to private investment. in this regard, bank of jamaica has been projecting a moderate economic recovery in the current fiscal year. thank you. bis central bankers ’ speeches

was temporary. in this regard, the bank is projecting that there will be a moderation in inflation in the march 2011 quarter, within the range of 1. 0 per cent to 2. 0 per cent. the projected deceleration in inflation in the march quarter is largely predicated on the expected price reversals for agriculture crops which occurred in the december quarter. in addition, we are expecting continued stable domestic capacity and declining inflation expectations to have a moderating impact on inflation. however, the bank is projecting continued increases in international commodity prices, which should be the major influence on inflation in the quarter. real sector the bank estimates indicate that real gdp contracted in the range of 0. 0 per cent to 1. 0 per cent for the december quarter, similar to the contraction in the september quarter. similar to our forecast in november 2010, all industries are estimated to have contracted with the exception of mining & quarrying and hotels & restaurants. underlying aggregate demand is estimated to have remained weak due mainly to continued declines in consumption and investment. for the march 2011 quarter, the bank is projecting that there will be marginal growth in economic activity. this will be largely driven by continued expansion in mining & quarrying and hotels & restaurants as well as growth in electricity & water supply. the strength of the expansion in these sectors is expected to offset the slower rate of decline in the other sectors. outlook the consensus is that the global economy grew at a faster rate in 2010 than was previously expected, led by emerging economies such as china and india. although the prospects for global growth in 2011 have also improved, this is expected to be at a slower rate than in 2010. this expectation of slower growth is in the context of monetary tightening being undertaken by some emerging economies. nonetheless, the forecast for continued growth in the world economy, particularly the usa, bodes well for remittance inflows and tourist arrivals to jamaica. in spite of the improvements in the global economy and the expected marginal growth in the march quarter, the jamaican economy is projected to contract in the range of 0. 0 per cent to 1. 0 per cent for fy 2010 / 11. the projected contraction is a direct result of the declines that were experienced in the first three quarters. however, we are expecting that growth in the march quarter will continue into the next fiscal year with all sectors being projected to register expansion. given the forecast for the march quarter, the bank is expecting inflation for fy 2010 / 11 to fall within our original