Jamaica's Economy Contracts 4.1% in Q1 2026

  • The impact of Hurricane Melissa continued to weigh on Jamaica's economy in the first quarter of 2026. According to the Statistical Institute of Jamaica (STATIN), real GDP (2015 constant prices) contracted by 4.1% year-over-year, below the 5.9% decline projected by the Planning Institute of Jamaica (PIOJ). The downturn reflected contractions in both the Goods-Producing Industries (-7.3%) and the Services Industries (-3.0%).
  • Within the Goods-Producing sector, structural damage and operational disruptions led to contractions in three out of four industries. Agriculture, Forestry & Fishing (-18.3%) recorded the largest decline due to extensive hurricane damage to crops and livestock, with sharp reductions in fruit, other crop, and yam production. Banana and plantain output fell by 86.0% and 83.7%, respectively.
  • Meanwhile, Manufacturing (+0.6%) was the only Goods-Producing industry to expand, driven by increased cement production to meet strong demand from hurricane recovery and reconstruction activities.
  • Similarly, most Services industries contracted, led by Accommodation & Food Service Activities (-16.6%), Electricity, Water Supply & Waste Management (-10.2%), and Transport & Storage (-5.5%), reflecting hurricane-related disruptions, lower tourist arrivals, and reduced utility consumption. Financial & Insurance Activities (+2.9%) was the only Services industry to grow, supported by stronger commercial banking performance, higher net interest income, and increased transaction and commission fees.
  • Looking ahead, the Bank of Jamaica (BOJ) expects some recovery in FY 2026/27 as reconstruction efforts from Hurricane Melissa advance and tourism-related activity, particularly in the western parishes, resumes. The BOJ projects that real GDP will expand by 1.0% to 3.0% in 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: STATIN & NCBCM Research)