Jamaica’s 2026 GDP Forecast Revised Upwards

• Despite the severe impact of Hurricane Melissa (October 2025), research firm Fitch BMI has revised Jamaica’s GDP forecast upwards. It now expects the economy to contract by 1.5% in 2026, down from its previous forecast of 2.3%.
• Data for the final quarter of 2025 shows a stark reversal in economic growth following Hurricane Melissa. However, the contraction was less severe than expected. For the first three quarters of 2025, the Jamaican economy mounted an encouraging recovery, following Hurricane Beryl, which caused extensive damage in July 2024, despite not making landfall. Broad-based sectoral gains were evident, with especially strong Q3 performances for Mining (4.0%), Agriculture (21%), Manufacturing (9%), and Accommodation (7%).
• Hurricane Melissa wiped out those advances, causing an estimated US$12Bn in damage (57% of GDP) and by far the costliest hurricane in Jamaica's history. In Q4 2025, mining contracted by 37.5%, agriculture fell nearly 18%, and accommodations dropped by 31.0%. Almost every sector except financial and insurance activities and public administration contracted dramatically. As a result, Jamaica's economy shrank by 7.1% in Q4 2025 alone, a sharp reversal from the 5.1% growth rate recorded in Q3, leaving GDP growth nearly flat for 2025 as a whole.
• While the contraction seen in Q4 2025 was significant, there are signs of resilience. The economic outcome was less severe than initially expected, despite the substantial damage suffered. Both the Planning Institute of Jamaica (PIOJ) and the Bank of Jamaica (BOJ) had projected a Q4 contraction in the range of 9-13%, and BMI’s own projections were broadly aligned, based on Jamaica's economic performance following previous storms and the relative strength of Hurricane Melissa.
• The economy fared better than expected, largely due to consumption proving surprisingly resilient, as did recovery efforts. Retail and wholesale trade declined by only 2.2% in Q4, helping to sustain the economy through the worst of the storm's aftermath. Several key factors underpinned this resilience: remittances remained strong (+8.4% in Q4); inflation was more contained than anticipated; and the labour market held up well - a notable outcome for a hurricane-battered economy.
• Nevertheless, quarterly contractions are expected to continue through Q3 2026, given the severity of the damage and strong base-period growth in early 2025, with expected weakness in tourism and bauxite mining weighing on performance. However, growth should turn positive in Q4 2026, supported by robust recovery efforts and favourable base effects.

(Source: BMI, A Fitch Solutions Company)