Jamaica’s Economy Projected to Decline by Up to 13%; “Based on the projections outlined, the country should brace for a recession,” says PIOJ Director General

Jamaica is staring down one of its most severe economic downturns in recent history, with the Planning Institute of Jamaica (PIOJ) projecting up to a 13% contraction in GDP for the October–December 2025 quarter. The staggering forecast comes as the island grapples with the widespread devastation left behind by Hurricane Melissa, which tore through the country last month, crippling key industries and disrupting livelihoods islandwide.

At Tuesday’s quarterly briefing, PIOJ Director General Dr Wayne Henry outlined a grim short-term trajectory, confirming that the storm’s impact has triggered widespread fallout across agriculture, tourism, construction, electricity, ICT, and transport — sectors that collectively power Jamaica’s economic engine. “The extent of the damage from Hurricane Melissa is unprecedented and far-reaching,” he cautioned, noting that the hardest-hit parishes represent the majority of the country’s domestic crop acreage and hotel room stock.

The ripple effects are already being felt. The PIOJ anticipates weakened output, reduced demand, and increased unemployment heading into 2026, with projections showing an overall economic contraction of 3% to 6% for FY 2025/26. This comes despite a strong 4.6% rebound recorded in the July–September quarter, which benefited from a low base following previous weather disruptions, including Hurricane Beryl. Now, officials warn that normalcy may not return until late 2026 as the country confronts rising climate-related shocks.

Comparisons are already being drawn to the COVID-19 economic collapse of 2020, with Dr Henry noting that the upcoming quarter is likely to be the worst on record since that period. While recession fears loom, he stressed that immediate priorities have shifted to humanitarian recovery — restoring livelihoods, protecting vulnerable groups, and accelerating relief efforts across ravaged communities.

As Jamaica picks up the pieces, the focus now turns to rapid rehabilitation and long-term resilience, with policymakers urging citizens to prepare for a challenging year ahead.

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