Growth picks up to 1.1% for December quarter

PIOJ predicts 0.5 to 1.5% growth for 2017/18

BY BALFORD HENRY
Senior staff reporter
balfordh@jamaicaobserver.com

Wednesday, February 14, 2018

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The Planning Institute of Jamaica (PIOJ) has projected growth in the Jamaican economy for financial year 2017/18 in the range of 0.5 per cent to 1.5 per cent.

Director General of the PIOJ Dr Wayne Henry said that the economy's performance during the October-December quarter of 2017/18, with an estimated growth of 1.1 per cent, was the strongest quarterly growth recorded during calendar year 2017/18.

That level of growth brought real GDP growth for the calendar year 2017 to 0.5 per cent, the fifth consecutive year of growth. However, it also represented a lower-than-projected performance compared to initial growth forecast which was within the one per cent to two per cent range.

“This performance was way below expectations, as downside risks to growth, cited at the beginning of the year, materialised,” Dr Henry admitted.

The downside risk he referred to included: weather -related shocks, which negatively impacted some industries, mainly agriculture; and plant down-time due to technical problems with equipment at some plants.

Dr Henry said that realisation of these critical supply-side constraints highlighted the need to place more focused efforts on the implementation of climate change mitigation strategies.

He said that these include, for example, protected agriculture (greenhouses) and irrigation systems to foster greater resilience and sustainability in domestic agricultural production. Additionally, he said that the retooling of plants to reduce plant downtime due to technical problems is of critical importance.

He added, however, that, in the near-term, the outlook for the economy remained positive.

Of the various factors threatening the projected figures, the PIOJ says it expects the January-March final quarter of 2017/18 to produce growth within the range of one to two per cent.

“We estimate GDP growth for financial year 2017/18 in the range of 0.5 per cent to 1.5 per cent,” he noted, pointing out that the performance in the final quarter of the fiscal year, January-March, 2018, will be buoyed by the recovery of the agriculture Industry, as well as robust performance of the mining & quarrying industry.

He said that the outlook for the financial year 2018/19 was also positive, with projected growth within the range of two per cent to three per cent, with the main drivers of growth expected to be the mining and quarrying, construction, agriculture and hotels and restaurants industries.

He said that the PIOJ underscores its commitment to fostering sustainable development, as reflected in the four pillars of the Vision 2030 Jamaica – National Development Plan.

“It is important to note that more robust and sustainable growth requires not only a focus on infrastructure-related projects and the business environment reforms, but also initiatives to enhance social protection, national security, cohesiveness and educational transformation, as well as building environmental resilience for the long term,” Dr Henry said.

He stated that the downside risks to the economy continue to be: larger-than-expected negative impact of heavy rains and flooding, particularly affecting agriculture, forestry and fishing; plant downtime associated with relatively aged equipment, especially in the mining and quarrying and manufacturing sectors; and slower-than-expected growth in the economies of Jamaica's main trading partners, which may negatively affect external demand for goods and services.

He informed the briefing that the 2015 State of the Jamaican Climate Report was also recently released.

“The report provides a concise overview of what is available and known about Jamaica's climate, by assessing historical climatic trends and producing near to long-term climate projections. The report aims at improving the quality and use of climate-related data and information for effective planning and action at the local and national levels,” he noted.

He pointed out that the key findings of the report were that mean temperature would increase by 0.85 per cent by 2050, with the 2030s being up to four per cent drier and the 2050s up to 10 per cent drier; two per cent less rainfall in the annual mean by the mid-2020s; an 80 per cent increase in the frequency of Saffir-Simpson category 4 and 5 Atlantic hurricanes over the next 80 years;nd sea-level rise of 0.26–0.82 metres by the year 2100.

“I encourage us all to maintain the dialogue, continue the collaboration, and remain focused, as we sustain our commitment to make Jamaica the place of choice to live, work, raise families and do business,” Dr Henry concluded.

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