Elevated Inflation To Delay Jamaica's Return To Pre-Pandemic GDP Levels To 2023

  • Jamaica’s real GDP is expected to grow 3.9% in 2022 according to Fitch Solutions. This is down from its previous forecast of 4.2%, as elevated inflation constrains private consumption and the tourism sector is impacted by weaker growth in source markets.  
  • In 2021 real GDP growth came in at 4.6%, above Fitch’s estimate of 4.1%, as a recovery in the tourism sector drove stronger-than-expected 6.7% y-o-y growth in Q421. In 2022, Fitch expects that tourism will continue to drive the post-pandemic recovery; however, the sector’s rebound will be constrained by weaker growth in key source markets in the months ahead. 
  • Additionally, high inflation in Jamaica will depress demand for consumer goods as households spend more on basic necessities like food, gasoline and electricity. While favourable base effects will keep growth above its 2015-19 average of 1.4%, Fitch’s new forecast implies real GDP will not return to pre-pandemic levels until 2023.

(Source: Fitch Solutions)