6 months ago
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The Planning Institute of Jamaica, PIOJ, expects the economy to grow in the March quarter but contract overall for the fiscal year.
It comes as the planning agency reported a second consecutive quarter of decline of 1.8 per cent in the October-December 2024 period. PIOJ’s estimates are preliminary. The final call on the performance of the economy rests with Statin, which is scheduled to release GDP data for the December quarter at the end of March.
PIOJ Director General Dr Wayne Henry said the contraction was induced by Hurricane Beryl rather than a weakness in the underlying economy. He said without Beryl, the economy would have continued its “strong performance”.
“It is the PIOJ’s assessment that the Jamaican economy, though facing a downturn in the economic output, is not in a recession,” he said at the quarterly press briefing on Wednesday. “The estimated outcome for the quarter largely reflected the lingering effects of Hurricane Beryl from the previous quarter, coupled with the storm Raphael and other hydrological events during the review quarter.”
Henry added that those shocks negatively impacted the performance of electricity, water supplies, agriculture, wholesale and retail trade, and manufacturing. During the December quarter, the goods-producing industries declined by 4.7 per cent, while the services industries declined by 0.7 per cent.
The agency also reported a contraction of 0.9 per cent in the economy for calendar year January-December 2024.
Recessions are technically defined as two consecutive quarters of GDP decline. But Henry noted that economists also consider factors such as employment rates, income, and production levels.
PIOJ forecasts a “return to positive output performance, that is, growth” for the January-March 2025 period, within a range of 0.1 to 1.0 per cent. For the fiscal year ending March 2025, however, the PIOJ projects real GDP will contract within the range of 0.5 per cent to 1.5 per cent.
Meanwhile, the planning agency is assessing global uncertainty around the threat of tariff hikes by President of the United States Donald Trump.
“We can agree that it is too early to determine the impact, as the precise nature and magnitude of these changes are still being announced and rolled out,” said Henry.
The hikes would impact Jamaica, particularly in areas such as trade, foreign aid, immigration and remittances, he said.
“The economy will return to positive output performance, that is, growth, in the January to March 2025 quarter,” stated Henry.
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