Economy declines by 1.7 per cent for January-March

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Economy declines by 1.7 per cent for January-March

Wednesday, May 27, 2020

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KINGSTON, Jamaica — The Planning Institute of Jamaica (PIOJ) this morning reported that the Jamaican economy declined by 1.7 per cent during the January to March quarter. This was largely attributed to the impacts of the ongoing COVID-19 pandemic.

During the quarter it was reported that while some sectors such as manufacturing grew by 2.7 per cent, and agriculture, forestry and fishing by 7.8 per cent, several other major industries experienced declines. Continued fallouts from the closure of the JISCO/Alpart plant saw mining and quarrying declining by 37.0 per cent, construction by 2 per cent, and the services industry by 1.5 per cent. In the services industry, the main sector— hotels and restaurants — fell by 13.9 per cent.

Director of General of the PIOJ, Dr Wayne Henry, while speaking in a quarterly briefing on the country's economic performance, said that with respect to tourism, sharp declines in stopovers and cruise passenger arrivals was also anticipated for the April to June 2020 quarter.

He said that the tourism sector is expected to record the most severe contraction in activities in areas including transportation, attractions, entertainment and hotel and restaurants.

“In light of the forgoing it is projected as to date, that theeconomy will contract in the range of negative 12.0-14.0 during the April-June 2020 quarter. This projection is based on projections and information and expectations to date which are very fluid and will change as new information becomes available.

“The extent of the decline is contingent on how soon the initiatives to boost the economic recovery activities become effective in Jamaica and its main trading partners,” he added.

Henry noted that based on these outturns they are expecting an estimated growth of 0.1 per cent for fiscal year 2019/2020 — down from the previous forecast of 0.6 per cent.

“Going forward, quarterly economic contractions are expected at least for the remainder of calendar year 2020, with a return to growth performance projected for the January to March quarter of 2021. However, the uncertainty regarding the depth [spread of infection] and the duration of the COVID-19 pandemic poses the main downside risk to this projection,” he said.

Henry further said that the continued negative outlook over the next quarters could result in a contraction along the range of negative 4.0-6.0 per cent for gross domestic product (GDP) for fiscal year 2020-2021, noting also that this would be the weakest economic performance in almost four decades— since a contraction of 4.6 per cent was recorded in 1985.

KELLARAY MILES


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