JAMAICA: Economy maintains growth trend over 2018

The Jamaica economy is continuing to rebound, showing signs that it is going to close 2018 with around 2 per cent growth after not growing by even 1 per cent in 2017.

Director General of the Planning Institute of Jamaica (PIOJ), Dr. Wayne Henry, said the economy grew by an estimated 1.9 per cent during the July to September 2018 quarter.

According to the Jamaica Information Service, Dr. Henry also said the prospects for October to December are “positive” and that “we expect the quarter as also the 2018/19 fiscal year to grow within the range of 1.5 to 2.5 per cent”.

He was speaking during the quarterly media briefing at the PIOJ’s head office in Kingston, Jamaica on Wednesday, November 21.

These economic results are in stark contrast to 2017, which saw the island’s economic growth decline to 0.7 per cent, mostly as a result of the impact of severe flooding and adverse weather conditions, according to the World Bank.

The economic rebound in 2018 has been driven by an estimated 5.2 per cent increase in the goods-producing industry, and 0.8 per cent for the services industry, said Henry.

Dr. Henry added that the results follow the 2.2 per cent growth recorded in the April to June quarter, and is indicative of continued strengthening in the pace of economic growth for the 2018/19 fiscal year, within the 1.5 to 2.5 per cent range.

He added that the expansion in economic activity for the September quarter largely reflects the positive impact of increased domestic demand, spurred by record levels of employment; increased business and consumer confidence; expansion of the mining and quarrying industry’s capacity utilisation; increased construction activities, specifically road network expansion, new hotel rooms and other commercial building developments; and continued macroeconomic stability.

“However, stronger growth was constrained by drought conditions that negatively impacted the agriculture industry, and plant down time in the manufacturing industry,” the Director General pointed out.

All subsectors in the goods-producing industry grew, except for manufacturing, which contracted by 0.8 per cent.
Mining and quarrying emerged the top performer with an impressive 54 per cent, followed by construction at three per cent, and agriculture, forestry and fishing – 0.7 per cent.

Dr. Henry said the performance for mining and quarrying reflected a 65.7 per cent increase in alumina production, specifically output from Alpart, which rose by 264 kilo tonnes, and Jamalco, up 16.7 per cent to 322 kilo tonnes.
The Director General noted that the growth in construction was indicative of increased activities in residential developments and civil works.

Works he cited included the National Works Agency’s (NWA) disbursement of JAM $71 billion (US $ 562.5 million), largely supporting engagements under the Major Infrastructure Development Programme, representing a 126.2 per cent increase; the Jamaica Public Service Company’s disbursement of $2.1 billion (US $16.6 million), representing a 3.4 per cent increase in expenditure for works involving construction of the new 190-megawatt liquefied natural gas (LNG) power plant in Old Harbour, St. Catherine, and other activities related to installation and expansion of the electricity distribution network.

In addition, there was National Water Commission’s (NWC) allocation of $1.2 billion (US $9.5 million), representing an 18.6 per cent increase, for the rehabilitation of potable water infrastructure in the Kingston Metropolitan Area, water supply systems in rural towns as well as pump and tank rehabilitation projects.

Meanwhile, the hotels and restaurants, at two per cent, recorded the largest growth in the services industry.
The growth as influenced by an estimated 3.8 per cent growth in foreign national arrivals to 551,692 persons, due mainly to increases from the United States market, up 6.4 per cent.

Dr. Henry told journalists that this out-turn outweighed declines of 3.2 and 0.9 per cent, respectively, in the Canadian and European markets.

While noting that cruise passenger arrivals declined by 16.3 per cent to 294,182 persons, Dr. Henry said total visitor expenditure for the quarter is estimated to have risen by 7.7 per cent to US$775.7 million.

He further advised that preliminary data for October 2018 indicates a 2.7 per cent increase in airport arrivals.
The other service industry subsectors recording growth were transport, storage and communication, up 1.4 per cent; finance and insurance services, up 1.2 per cent; and wholesale and retail trade, repair and installation of machinery, and real estate, renting and business services, both up 0.6 per cent.

Meanwhile, Dr. Henry said the economy is estimated to have grown by 1.8 per cent over the first nine months of the calendar year, from January to September.

This, he pointed out, reflected estimated growth of five and 0.8 per cent, respectively, for the goods producing and services industries.

The sectors recording the largest increases were mining and quarrying, up 37.1 per cent; construction, up 2.3 per cent; agriculture, up 4.8 per cent; transport, storage and communication, up 1.5 per cent; and hotels and restaurants, up 1.4 per cent.

Credit; Caribbean360

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