Jamaica’s Economy Inches Toward Recovery as Projected Q2 Contraction Eases

• The Planning Institute of Jamaica (PIOJ) released preliminary estimates showing that the economy contracted by 2.9% in the April–June 2026 quarter (Q2 2026) relative to the same period in 2025. The decline was broad-based, with the Goods Producing Industry down 6.4% and the Services Industry down 1.7%, as several industries continued to recover from the disruption caused by Hurricane Melissa while facing other weather-related and geopolitical pressures.
• Within the Goods Producing Industry, Mining & Quarrying recorded the steepest contraction at -23.9%, followed by Agriculture, Forestry & Fishing at -17.0%. Manufacturing, however, expanded by 1.0%, while Construction posted marginal growth of 0.3%. The Mining decline remained severe following contractions of 37.5% in Q4 2025 and 23.5% in Q1 2026, underscoring the continued weakness in bauxite and alumina production. Agricultural output also remained significantly below year-earlier levels, although the pace of contraction improved modestly from -18.3% in the previous quarter.
• Within the Services Industry, Accommodation & Food Service Activities remained the weakest-performing segment, contracting 12.2%, although this represented further improvement from the 31.0% decline recorded in Q4 2025 and a 16.6% decline in Q1 2026. Electricity, Water Supply & Waste Management fell 4.1%, Transport & Storage declined 3.9%, Real Estate & Business Activities fell 2.2%, and Information & Communication contracted 2.0%. Education, Health & Other Services also declined 1.8%. Offsetting some of these declines were Financial & Insurance Activities (+1.9%), Wholesale & Retail Trade (+0.2%), and Public Administration & Defence (+0.1%).
• The April–June 2026 performance marks a further moderation in the pace of contraction compared with the previous two quarters, suggesting that the Jamaican economy is gradually moving through the recovery phase following Hurricane Melissa. The faster pace of recovery across most industries, along with the full operationalisation of the National Reconstruction and Resilience Authority (NaRRA), represents potential upside to near-term activity. However, lingering weather-related shocks like the forecasted super El Niño this year, worsening geopolitical tensions, and delays in the execution of major infrastructure projects remain key drags on growth.
• Looking ahead, the PIOJ projects the economy to contract by 0.5%–1.5% in July–September 2026, as lower production in several industries continues to weigh on activity amid the ongoing recovery from Hurricane Melissa and broader geopolitical and weather-related challenges persist. For Fiscal Year 2026/27, however, growth is projected within the range of 1.0%–3.0%, reflecting expectations of a broader recovery as productive capacity is restored and industries return toward normal operations.

(Sources: PIOJ & NCBCM Research)