Jamaica’s Private and Government Consumption to Remain Key Components of Economic Activity

• Household spending in Jamaica will remain, by far, the largest component of economic activity, on the back of high remittance inflows and rising employment. Fitch forecasts that annual growth will average 1.8% from 2022 to 2031, and relatively weak investment will ensure that private consumption makes up a greater part of the economy.
• In the short term, consumption growth will be limited by higher inflation rates. However, social spending programmes and tax reductions for lower-income households will bolster disposable incomes.
• As the Jamaican government continues to exercise fiscal constraints to reduce debt, Fitch expects that government consumption as a percentage of GDP will decline moderately over the next decade. Government consumption as a percentage of GDP already fell from 16.3% in 2012 to 13.6% in 2019, with further plans to reduce government outlays.

(Source: Fitch Solutions)