Farms sprout green shoots as economy rebounds
Published:Thursday | February 17, 2022 | 12:11 AM
The Jamaican economy expanded by six per cent in the December quarter, largely spurred by the continued relaxation of global COVID-19 containment measures that facilitated increased domestic and external demand.
Planning Institute of Jamaica (PIOJ) Director General Dr Wayne Henry said increased opening hours for businesses, higher levels of employment, and improved business and consumer confidence also contributed to the growth.
Henry was speaking during Wednesday’s quarterly press briefing, in which he provided preliminary estimates on the performance of the economy for the period October to December 2021.
The goods-producing industry is estimated to have increased by 0.4 per cent on the back of improved performance in two of four industries – agriculture and construction.
The agriculture, forestry, and fishing industry grew by 12.1 per cent, while construction increased by 6.4 per cent.
Henry explained that the improvement in agriculture reflected the impact of increased demand, particularly from the tourism sector, which grew consequent on the relaxation of COVID-19 measures.
The mining and quarrying sector contracted by 64.7 per cent.
“This was due to declines in both alumina and crude bauxite production. Alumina production decreased by 75.3 per cent, largely due to no production at the Jamalco refinery, which was impacted by a fire at the powerhouse, resulting in a cessation of operations since September 2021,” Henry said..
The manufacturing sector also recorded a decline of 0.9 per cent in the December quarter because of a reduction in output in the other manufacturing sub-industry, which outweighed an estimated increase in the food, beverages, and tobacco sub-industry.
“Other manufacturing was estimated to have contracted, reflecting a decline in the production of petroleum products, due largely to the closure of the plant for approximately 44 days to facilitate maintenance activities. Production of all petroleum products surveyed declined,” Henry said.
Hotels and restaurants recorded the highest growth in the services industries, with an increase of 76.2 per cent.
Total stopover arrivals increased by 186.3 per cent in October and November 2021.
Cruise passenger arrivals amounted to 32,719 passengers, relative to none in the corresponding period of 2020.
Henry said, for the 2021 calendar year, real gross domestic product (GDP) was estimated to have increased by 4.4 per cent.
“Growth in 2021 was led by hotels and restaurants, up 36.4 per cent; construction, up 9.1 per cent; agriculture, forestry and fishing, up 7.9 per cent; and wholesale and retail trade, repair and installation of machinery, up 6.6 per cent,” the director general said.
The PIOJ has said that short-term prospects for the Jamaican economy are positive, given the expected impact of the further easing of COVID-19 measures.
“The further opening up of the economies of Jamaica’s main trading partners will support higher levels of external demand, particularly for tourism-related products and services. Increased employment levels and the strengthening of businesses and consumer confidence levels are expected to support greater domestic demand in the short-to-medium term,” Henry said.
The PIOJ director general said the main downside to the positive outlook continues to be the possibility of additional waves of COVID-19 infections.
He said, given the relatively low rate of vaccination in Jamaica – currently below 23 per cent – there remained the risk of reimposed public-health and movement measures and a curtailment in demand.
For the current quarter, it is projected that the economy will grow within a range of five to seven per cent.