Jamaican GDP back to pre-COVID levels
The size of the Jamaican economy should return to pre-pandemic levels, a year ahead of expectations, the Planning Institute of Jamaica, PIOJ, predicted on Tuesday.
It signals a recovery from one of the worst recorded shocks in Jamaica’s history.
“The latest projection is that the Jamaican economy is likely to fully recover to pre-COVID-19 output in fiscal year 2022/23 earlier than the previously projected 2023/24,” said PIOJ Director General Dr Wayne Henry at his quarterly briefing on the performance of the economy.
In 2020, the Jamaican economy lost one-tenth of its value when COVID-19 measures resulted in the temporary shuttering of entire industries to contain the spread of the virus.
Gross domestic product, GDP, a primary measure of economic output, stood at $2.1 trillion in 2019, based on market prices, according to the Statistical Institute of Jamaica, the official arbiter of national statistics. The Financial Gleaner estimates that for this calendar year, the value of GDP will increase beyond $2.5 trillion, based on the annualised nine-month estimate of $1.92 trillion reported by Statin so far to September 2022.
In real terms or constant prices, Statin data shows that the economy grew by 5.7 per cent over the first nine months, encompassing the January-September period of calendar year 2022.
PIOJ generally relays its estimates ahead of Statin’s final pronouncement on economic growth.
“The PIOJ releases the preliminary growth estimate within the first six weeks following the end of the quarter being reviewed, and Statin releases the official GDP figures at the end of the third month following the quarter being reviewed,” Henry said.
PIOJ reported on Tuesday that the economy grew by an estimated 3.4 per cent for the October-December 2022 quarter, relative to the corresponding quarter of 2021.
The economy benefited from growth of 4.3 per cent for goods-producing industries, with the mining subsector contributing the most to the recovering numbers. Mining’s output rose by 115 per cent due to the reopening of the Jamalco alumina refinery that was affected by fire a year earlier.
The services industry grew by 3.0 per cent led by the hotels and restaurants subsector up 24 per cent, amid the continued recovery of tourism.
“The estimated outturn for the review quarter largely reflected the positive impact of a strengthening of economic activity, as some industries showed signs of returning to and surpassing their pre-COVID levels of output,” said Dr Henry.
He added that during the December quarter that increased growth in Jamaica’s major trading partners resulted in increased export demand for goods. Additionally the mining sector benefited from increased “capacity utilisation” as Jamalco ramped up production. Dr Henry added that the economy also benefited from increased business and consumer confidence going into the Christmas season.
Across the 2022 calendar year, the PIOJ estimated growth at 5.1 per cent.
“All industries are estimated to have recorded growth in output, with the exception of the construction and mining & quarrying industries,” PIOJ said.
Going forward as more industries recover, the PIOJ head and his team expects more growth for the economy but at a slower pace.
For the upcoming fiscal year ending March 2024, the economy is projected to grow within the range of 1.0 per cent to 3.0 per cent. It represents a “return to the long-term trend of growth,” PIOJ said.
Jamaica’s growth since the 1990s and prior to the pandemic, hovered at around 1.0 per cent per annum, performing well below its peers in the Caribbean region.
The pace of economic growth will slow similar to that of the global economy, Dr Henry added. Consequently, the Government’s economic team has refocused its efforts on building economic resilience by removing inhibitors to growth and developing policy initiatives geared at addressing these constraints, he said. These include focusing on policies that develop resilience to shocks, build climate sustainability, develop skillsets and training for new industries, while diversifying the economy.
Statin is expected to release its estimate of GDP and economic growth for the December 2022 quarter on March 31.