Jamaican Economy Grows 5.7% in Q2 2022

  • According to the Planning Institute of Jamaica (PIOJ), the Jamaican economy reported a 5.7% expansion in GDP for the June quarter relative to the corresponding quarter for 2021. The estimated output in the Goods Producing Industry declined by 0.4%, while the Services Industry increased by 7.7%.
  • The performance was premised on a few key factors, including increased employment, both locally and in major trading partners; and greater resumption of tourist, economic and business activities due to the removal of COVID-19 measures.
  • The growth in the Services Industry was due to improved performance in all eight (8) industries. However, Hotels & Restaurants led the recovery, registering an increase of 55.4%. The other major contributors to the performance in the Services Industries were Other Services (25.0%), Transport, Storage & Communication (10%) and Wholesale & Retail Trade; Repairs; Installation of Machinery & Equipment (5.8%).
  • On the other hand, the performance of the Mining & Quarrying (-60.6%) and Construction (-4.2%) Industries led to the decline in the Goods Producing Industries. This was however tempered by growth in the Manufacturing (2.8%) and Agriculture, Forestry & Fishing (12.6%) Industries. The outturn in the Mining & Quarrying Industry continues to be impacted by the closure of the JAMALCO alumina plant in Clarendon after a fire in August last year. Operations at the plant are however expected to fully resume during the latter part of this fiscal year.
  • For the September 2022 quarter, PIOJ anticipates that the Jamaican economy will expand within the range of 2-3%, given a continuation of recovery efforts, reopening of the JAMALCO plant, improved labour market outturns and a strengthening of the global economy, supported by a restoration in global supply chains in key areas such as energy and grains.
  • Current projections are that for all quarters of FY2022/23, the country will record higher levels of output relative to the subdued performance in FY2021/22. As such, the PIOJ's projection is for growth in output within the range of 3-5% for the full FY2022/23. It must however be noted that the economy is not expected to attain pre-COVID GDP levels until FY2023/24.
  • However, the downside risks to the outlook are the presence of the ever-evolving COVID-19 virus, Monkeypox, and the negative impact of inflation and interest rate challenges on consumers and businesses.

(Sources: PIOJ & NCBCM Research)