September 5, 2024

According to preliminary estimates from the Planning Institute of Jamaica (PIOJ), for the April – June 2024 quarter, the Jamaican economy remained relatively flat with real GDP estimated to have grown by 0.1% relative to the corresponding quarter of 2023.

The performance for the April to June 2024 quarter was influenced by several key factors:

• Strengthening of consumer confidence as well as relatively high levels of employment which supported increased levels of domestic demand for goods and services.
• Growth in the economies of Jamaica’s major trading partners, which supported external demand.
• Challenges associated with a fire at Petrojam refinery in March 2024, which negatively impacted production during the review quarter.
• Challenges associated with a fall in Business Confidence, as less firms believe that the climate is good for investment.

The Goods Producing Industry is estimated to have increased by 0.7%, due to improvements in the Agriculture (+2.7%) and Mining & Quarrying (+6.2%) industries, while the Manufacturing industry recorded a flat performance, and the construction (-2.4%) industry recorded a decline for third consecutive quarter.

The improved performance for the Goods Producing Industry stemmed from favorable weather conditions and an expansion in alumina production.

The Services Industry was estimated to have grown by 0.1%, relative to the corresponding quarter of the previous year. This reflected higher Real Value Added for most industries, Electricity & Water Supply (+2.3%), Finance & Insurance Services (+1.0%), and Hotels and Restaurants (+0.1%). However, Transport, Storage & Communication (-0.3%), and Wholesale & Retail Trade; Repair and Installation of Machinery (-0.9%), declined.

The improved performance for the Services Industry was primarily driven by a general increase in electricity and water consumption, along with a higher stock of loans and advances at deposit-taking institutions and higher income from fees and commission, reflecting increased usage of financial services.

Outlook 

For July – September 2024, the economic growth prospects for Jamaica are negative, largely associated with the adverse impact of Hurricane Beryl on production activities. As such, it is anticipated that the economy will contract within the range of -0.1% to -1.0%. This projection is further supported by preliminary data received for July 2024 which indicate downturns in:

• Hotels & Restaurants – with provisional data reflecting a decline of 7.7% in airport arrivals.
• Electricity & Water Supply – reflecting decreases in both electricity and water consumption. Electricity consumption for the month of July 2024 fell by 13.8% to 265.3 million kilowatt hours. Water consumption also declined by 1.9%.
• Mining & Quarrying – For the month of July 2024 alumina production fell by 23.4% and crude bauxite production declined by 7.6%.

The preliminary data for the April to June 2024 quarter shows relatively flat performance, with a projected contraction for the July-September quarter due to the impact of Hurricane Beryl on industries such as Electricity & Water and Agriculture. The full fiscal year 2024/25 outlook is uncertain, with growth expected to range from -1.0% to 1.0%, largely dependent on the pace of recovery from the hurricane’s fallout.

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