Jamaica's Economy Contracts 2.9% in Q2 2026

Although the lingering effects of Hurricane Melissa and adverse weather conditions continued to weigh on economic activity, the contraction in the Jamaican economy moderated in the second quarter of 2026 (Q2 2026). According to the Statistical Institute of Jamaica (STATIN), real gross domestic product (GDP) contracted by 2.9% year-over-year (YoY), following declines of 7.1% in Q4 2025 and 4.1% in Q1 2026. Both the Goods Producing Industries (6.3%) and Services Industries (-1.8%) declined.
Within the Goods Producing Industries, Agriculture, Forestry & Fishing (-15.3%) and Mining & Quarrying (-26.1%) recorded significant declines. Agricultural output was affected by dry conditions across most parishes and the lingering impact of Hurricane Melissa, with banana and plantain production falling by 72.0% and 77.5%, respectively. Mining & Quarrying continued to be constrained by lower bauxite and alumina production, which declined by 16.1% and 30.8%, respectively.
In contrast, Manufacturing (+0.1%) and Construction (+0.4%) recorded marginal growth, supported by higher cement production and increased activity in civil engineering and building construction.
Within the Services Industries, Accommodation & Food Service Activities (-12.3%) recorded the largest contraction, reflecting a 21.0% decline in foreign national arrivals and the continued closure of some hotels. Transport & Storage (6.1%) also declined amid lower tourism-related travel and a 15.1% fall in total airport passenger traffic. Electricity, Water Supply & Waste Management (-4.2%), Real Estate & Business Activities (-3.7%), and Information & Communication (-1.5%) also contracted. These declines were partially offset by growth in Financial & Insurance Activities (+3.0%), Wholesale & Retail Trade (+0.6%), and Public Administration & Defence (+0.3%).
The Q2 contraction, nevertheless, represents an improvement from the 4.1% decline recorded in Q1, as the pace of contraction moderated across several hurricane-affected industries. Accommodation & Food Service Activities, for example, improved from a 16.6% contraction in Q1, while Manufacturing and Construction recorded growth. However, the continued weakness in tourism, agriculture and mining indicates that key foreign-exchange-earning and productive sectors remain under pressure.
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. However, the recovery remains subject to downside risks, including elevated global energy prices and higher production and transportation costs associated with geopolitical tensions in the Middle East.

(Sources: STATIN, PIOJ, & NCBCM Research)