Hurricane Melissa Slams Jamaica: Economy Shrinks 7.1% in Q4 2025

Given the extensive damage caused by Hurricane Melissa, the Jamaican economy contracted by a steep 7.1% in the fourth quarter of 2025 (Q4 2025) compared to Q4 2024, according to data from the Statistical Institute of Jamaica (STATIN). With both the extent of the destruction and the disruptions to business activity, both the Goods-Producing and Services industries contracted, falling by 10.7% and 5.9%, respectively.
In the Goods-Producing sector, all industries contracted. Agriculture, Forestry, and Fishing were among the hardest hit, declining by 17.7%, as the hurricane destroyed both crops and livestock. Its impact on the western end of the island caused lower crop yields, delayed planting schedules, and the loss of livestock intended for slaughter during the period. Mining and Quarrying experienced the steepest contraction of 37.5% as hurricane-related damage to equipment and infrastructure caused downtime and lost production days. Manufacturing and Construction also contracted by 8.1% and 2.5%, respectively, reflecting both direct and indirect effects of the storm.
Within the Services sector, most industries experienced declines. Accommodation and Food Services contracted by 31.0%, as hotel closures in the western parishes coincided with a 43.0% decline in foreign arrivals to the island. Transport and Storage declined by 7.5%, reflecting reduced airport activity and lower tourism-related travel. Additionally, Electricity, Water Supply, and Waste Management fell by 11.7% due to damage to the electricity grid, which also disrupted water supply across affected areas, while Information and Communication fell by 12.6%. Other industries, including Wholesale and Retail Trade, Repair and Installation of Machinery and Equipment, Real Estate and Business Activities, and Education, Health, and Other Services, declined by 2.2%, 3.5%, and 6.8%, respectively. Financial and Insurance Activities (+1.4%) and Public Administration and Defence (+2.2%) were the only exceptions.
Compared to the previous quarter (July–September 2025), total value added at constant prices (seasonally adjusted) fell by 7.3%. Services and Goods-Producing Industries declined by 6.2% and 10.5%, respectively.
Despite the disruptions in economic activity in the final quarter of the year, preliminary estimates indicate that for the full calendar year 2025, total real-value-added increased marginally by 0.1%, supported by modest growth of 1.2% in the Goods-Producing sector.
Looking ahead, the Bank of Jamaica (BOJ) expects economic recovery in 2026 as reconstruction efforts from Hurricane Melissa advance and tourism-related activity, particularly in the western parishes, resumes. The Central Bank projects that real GDP will expand within the range of 1.0% to 3.0% for fiscal year 2026/27. However, downside risks persist, particularly related to the potential adverse impact of the conflict in the Middle East on global energy prices, consumer disposable incomes, production costs and sentiment on key service industries such as the Tourism sector.

(Sources: JSE & NCBCM Research)