PIOJ predicts 1.3% growth for 2016

PIOJ predicts 1.3% growth for 2016

BY KARENA BENNETT Business reporter bennettk@jamaicaobserver.com

Friday, August 26, 2016

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Newly appointed director general of the Planning Institute of Jamaica (PIOJ), Wayne Henry, anticipates growth of roughly 1.3 per cent for the 2016/2017 fiscal year.

The growth, although small, would be 0.4 percentage points higher than the growth experienced for the 2015/2016 fiscal year. Ministry of Finance in its Fiscal Policy Paper 2016/2017 noted that real GDP growth under the Extended Fund Facility averaged 0.6 per cent for fiscal years 2013/14 and 2014/15, but is expected to pick up from fiscal year 2016/17 onward, averaging 2.0 per cent to 3.0 per cent per annum.

"We continue to monitor and update as more data becomes available. Our projections for 2016/2017 fiscal year we are projecting within the range of one to two per cent of growth and in point estimate we have estimated 1.3 per cent," Henry said during a media briefing for the review of the April to June 2016 quarter at the PIOJ headquarters in new Kingston on Wednesday.

"That’s baseline, it is relatively conservative as we said it could be higher as we see some other activities come on stream and of course that is subject to the possible downside risk of adverse weather conditions, slower than anticipated improvement in the global economy, Brexit and some other matters relating to the IMF."

Real Gross Domestic Product (GDP) in the economy grew by an estimated 1.1 per cent in the April to June 2016 quarter compared with the corresponding quarter of 2015, according to the report published by the PIOJ.

The macroeconomic performance follows a fifth consecutive quarter of growth which was largely due to favourable weather conditions; the positive impact of continued strengthening of the global economy on some industries including hotels and restaurants; improvement in domestic demand resulting from the strengthening of both business and consumer confidence levels; and higher levels of construction activities, the report continued.

"The out-turn for the April to June 2016 period largely reflected favourable weather conditions relative to the corresponding period of 2015, which positively impacted the performances of the Agriculture, Forestry & Fishing and the Electricity and Water Supply Industries," the director general said.

"Cumulative rainfall for the first six months of 2016 was 105 per cent of the 30-year mean, compared with 67 per cent of the 30-year mean recorded in the corresponding period of 2015."

The goods producing industry recorded growth for all industries except mining and quarrying which fell by 1.3 per cent. Agriculture, forestry and fishing registered the largest increase of seven per cent followed by manufacturing up by 0.7 per cent and construction up 0.4 per cent.

Within the services industry, seven of the eight industries performed positively, except the producers of government services which recorded a decline of 0.2 per cent. The industries with the largest increase registered were electricity and water supply, up 5.5 per cent; hotels and restaurants, up 1.6 per cent and finance and insurance services, up one per cent.

The increase in hotels and restaurants reflected an increase in stopover arrivals of 1.8 per cent. Additionally, cruise passengers arrivals rose by 5.5 per cent, contributing an increase of 3.2 per cent in total visitor arrivals. Visitor expenditure also increased by 4.1 per cent to US$595.1 million, reflecting higher expenditure by stopover visitors, up 3.8 per cent to US$564.4 million and cruise passenger, up 9.9 per cent to US$30.7 million.

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