LETTER | Wrong growth contrast

THE EDITOR, Madam:

I write in response to the story ‘S&P sees stable future for Jamaica’ that appeared in The Gleaner on October 6. The story contained the sentence: “In contrast to government projection of seven to 10 per cent GDP growth for the fiscal year to March 2022, S&P is predicting GDP growth of 3.7 per cent in 2021.” This gives the wrong impression that the Government’s (that is, PIOJ’s) growth projection is at material variance with S&P’s. This is not the case.

The Gleaner is contrasting two estimates that relate to different, though overlapping, time periods. In the case of S&P, their projection relates to the calendar year January to December 2021, while the Government’s projection relates to the fiscal year April 2021-March 2022. The calendar year includes the period January-March 2021, when the economy contracted by 6.7 per cent on account of the continued effects of the COVID-19 pandemic.

Even after incorporating that decline, however, S&P forecasts 3.7 per cent growth for the full calendar year, which implies elevated levels of growth for the April-December 2021 period, which is consistent with the Government’s projections.

Please bear this time period difference in mind for future reference, as it is often the case that rating agencies speak to calendar year growth forecasts.

Nigel Clarke

Minister of Finance and the Public Service