The Jamaican economy recorded a flat growth rate of just 0.1 per cent in the April-June quarter of 2024, with the immediate short-term outlook, including the July-September quarter, and for fiscal year 2024/2025, being negative.
This was stated on Wednesday by Director General of the Planning Institute of Jamaica (PIOJ), Dr Wayne Henry, during the institute’s quarterly media briefing at its New Kingston headquarters.
“The short-term prospects for the overall economy are negative, largely associated with the adverse impact of Hurricane Beryl on production activities. A downturn in output levels is projected for some industries, including agriculture, forestry and fisheries, mining and quarrying, electricity and water supply, as well as the hotels and restaurants industries,” Henry outlined.
He noted that the agriculture, forestry and fishing industry reported preliminary estimate of damage of $10 billion, with the most significant fallout experienced by farmers along the southern belt – namely in the parishes of St Elizabeth, Clarendon, Westmoreland and Manchester.
These four parishes accounted for 54.7 per cent of total hectares reaped for domestic crops during the review quarter.
Henry outlined that the performance of the mining and quarrying industry was also negatively affected by Hurricane Beryl that hit the island on July 3, as the port at Rocky Point was damaged, causing the diversion of alumina export to an alternative port.
“It is anticipated that the electricity and water supply industry will record significant damage and loss as a result of the destruction to infrastructure assets caused by the hurricane,” he explained further. He noted that a detailed assessment is still being undertaken as the majority of the recovery work has just been completed.
The PIOJ director general highlighted that certain sections of the island were negatively impacted by the difficulty in restoring electricity, which would have implications for production across different industries.
In the tourism sector, Henry said the hotel and restaurants industry was affected by the cancellation of flights, and diversion of visitors to other destinations due to the passage of Beryl.
“The forecast is for a downturn in foreign national arrivals during the quarter,” he said.
Henry explained that the drag on growth arising from these developments, could be partially tempered by upside potential factors such as improved business and consumer confidence which could serve to drive domestic demand, stronger than anticipated growth, in the global economy, which could strengthen external demand, and the expected boost in construction-related activities associated with the recovery and rebuilding efforts following Hurricane Beryl.
And increased capital expenditure for road repairs as well as on electricity, water and telecommunication distribution systems, are expected to provide a boost to the construction industry.
“Against this background, for the July – September quarter 2024, it is anticipated that the economy will contract within the range of negative 0.1 per cent to negative one per cent.
“This projection is further supported by preliminary data received for July 2024 which indicate downturns in hotels and restaurants, with provisional data reflecting a decline of 7.7 per cent in airport arrivals, electricity and water supply reflecting decreases in both electricity and water consumption,” said Henry.
Of note is that electricity consumption for July 2024 fell by a significant 13.8 per cent to 265.3 billion kilowatt hours, water consumption also declined by 1.9 per cent during the month.
As it relates to mining and quarrying, the month of July saw a falloff in alumina production of 23.4 per cent while crude bauxite production declined by 7.6 per cent.
For fiscal year 2024/25, the PIOJ’s fiscal year projection is for GDP change within the range of negative one per cent to one per cent.
Said Henry: “The preliminary data presented on performance for April-June indicate that the performance was relatively flat, and the short-term outlook for the July to September quarter is for contraction in outlook which would largely reflect the impact of Hurricane Beryl on industries such as electricity and water and agriculture”.
Particularly concerning is that for the full fiscal year 2024/25, the projection is more uncertain, ranging from -one per cent to positive or one per cent. This is largely dependent on the pace of recovery from the fallout from the hurricane.
