Jamaican economy facing challenges in 2025, politics will be a factor, says Don Anderson
Published:Sunday | December 29, 2024 | 12:09 AM
The Jamaican economy is facing serious challenges going into the first quarter of 2025, and political decisions are likely to play an important role over the next few months, said noted researcher Don Anderson.
With the economic indicators trending downwards over the last few months and the opposition People’s National Party (PNP) ahead in the polls, Prime Minister Andrew Holness faces a tough decision as to when to call the general elections, Anderson indicated.
“Were you the prime minister, when would you call it?” retorted Anderson, a pollster and managing director of Market Research Services. “When you look at what’s happening, you can’t help but conclude that going forward into 2025, the economy is actually running into some headwinds.”
He was speaking at the Rotary Club of North St Andrew, Kingston, in mid-December.
The Opposition PNP currently leads the Jamaica Labour Party by 9.0 percentage points in Anderson’s polls, which have a margin of error of 3.0 percentage points. He anticipates political campaigning to begin in early 2025, ahead of the general elections constitutionally due in September.
Some key economic indicators are in decline affected by the passage of Hurricane Beryl and global inflation. In the September 2024 quarter, the economy fell by 2.8 per cent compared to year-earlier levels. The decline was also reflected in the microeconomy as shown in the survey of Business and Consumer Confidence conducted quarterly by Anderson’s firm.
“The Government has to pivot to find a way to deflect that somewhere along the line,” said Anderson.
He noted that 95 per cent of consumers felt the impact of higher prices. Additionally, only one-quarter of businesses felt that the economy was going to get better in the next 12 months. Anderson also noted that crime and violence continued to top concerns raised by consumers and businesses. In fact, three-quarters of respondents felt that crime would worsen in 2025. He noted that this finding comes against the statistical reality that major crime has declined by 12 per cent in 2024 compared to last year.
On the other hand, one-third of businesses felt that conditions would get better,while not pointing to any specific reason.
On the question of remittances, Anderson noted that since the start of the pandemic to 2024 the percentage of households receiving remittances had fallen by 6.0 percentage points to under 27 per cent of households. “It means that there’s a significant shortfall in the ability of persons to meet their daily expenses,” he said. “It means that at a time when people are skeptical about the economy going forward, people are getting less money in their pockets through a remittance system.”
In essence, consumers are generally facing a “major problem” Anderson said.