Business

Vaz hopeful of real economic growth by 2018/19 and less unemployment

BY BALFORD HENRY
Senior staff reporter
balfordh@jamaicaobserver.com

Wednesday, May 23, 2018

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Minister without portfolio in the Ministry of Economic Growth and Job Creation Daryl Vaz, says that despite setbacks in the economy last year, which could result in growth of less than one percent for 2017/18, he is optimistic about real growth beginning in 2018/19.

Vaz, whose portfolio responsibilities include land, climate change and investment, was speaking in the sectoral debate in the House of Representatives on May 15.

He noted that, despite preliminary projections for growth in 2017/18 of less than one per cent, the Planning Institute of Jamaica (PIOJ) has projected 2.5 per cent growth for 2018/19.

He said that growth with jobs is the aim of the Administration, and admitted some disappointment with the PIOJ's projection of a 0.9 per cent growth for 2017/18.

However, he noted that the PIOJ was still in the process of collecting the data for the last quarter of that recently concluded financial year, and expressed the hope that this could lead to a revision of the institute's growth projection for the period.

But he was buoyed by the PIOJ's projection for growth of 2.5 per cent in 2018/19 and three per cent in 2019/20.

The minister addressed these increases against the backdrop of the “5 in 4” projection made by the Economic Growth Council (EGC), noting that the 2.5 per cent projected for 2018/19 and the three per cent projected for2019/20 reflected several positive factors including: the continued strengthening of most industries, increased local demand associated with projected higher employment levels and investment, growth in external demand for Jamaica's goods and services, strengthening of competitiveness in some industries following the upgrading of plants during the previous year, improvements in the business environment, the roll-out of major strategic investment projects, and recovery from the negative impact of flooding and excessive rainfall.

He pointed out that for 2019/2020, the PIOJ is projecting economic growth of 3.0 per cent, as against the “5 in 4” growth projection by the EGC, reflecting growth in all industries with the exception of producers of government services due to the fiscal consolidation programme being pursued by the Government.

“It is expected that growth will be propelled by increased capital utilisation in some industries as a result of higher local and external demand,” he said.

Turning to unemployment, he said that the country is reaping success from the plans and programmes the Government has put in place in partnership with the private sector.

“The proof of the pudding is the unemployment rate which, I am happy to say, continues to trend downwards,” he noted.

He said that the Statistical Institute of Jamaica reporting that in January the rate was 9.6 per cent, the lowest it has been since October 2008. This represents a decrease of 3.1 percentage points, when compared with 12.7 per cent in January 2017.

In the same period, the unemployment rate for males decreased by 1.5 percentage points, from 9.0 per cent to 7.5 per cent, while the rate for females had a larger decline (4.9 percentage points), from 17.0 per cent to 12.1 per cent.

He noted that the unemployment rate for youth was 23.8 per cent in January 2018, representing a decrease of 7.4 percentage points, when compared to the rate of 31.2 per cent in January 2017.

“We will not stop until all the figures are in single digits. It is important to note that most of those who gained employment were non-government employees. This is consistent with the GOJ goal for the private sector to be the principal engine of economic growth,” he stated.

According to the minister, one of the driving forces behind the lowered unemployment figures is outsourcing, which the Government has identified as a key pillar of the country's economic growth and job creation strategy.

The Information and Communication Technology/ Business Process Outsourcing sector continues to be a high performing segment of Jamaica's services industries and has enjoyed the highest employment growth rate of any sector in the last decade, he said.

Vaz stated that, currently, over 60 companies offer call centre and BPO services, and they account for more than 26,000 jobs across the island.

He also noted that the country had already surpassed its target of 11,000 jobs for the 2017/2018 fiscal year, with a forecast of 11,665 jobs created as at November 2017, and he anticipates even further growth in the sector this year.

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