ECONOMY SHRINKS

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ECONOMY SHRINKS

STATIN reports 10.7% GDP decline in third quarter

Sunday, January 03, 2021

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THE Statistical Institute of Jamaica (STATIN) has reported that the economy declined by 10.7 per cent during the third quarter of 2020 when compared to the same quarter in the previous year.

“This was due to declines in both the services and goods-producing industries of 13.1 per cent and 3.5 per cent, respectively. The economy was impacted by the continued spread of the novel coronavirus and the measures implemented to limit its spread,” the State agency said in a quarterly news release last Thursday.

The performance was a 0.6 percentage point reduction on the 11.3 per cent decline previously projected by the Planning Institute of Jamaica (PIOJ) in its preliminary estimates for the quarter.

Last month, Finance Minister Dr Nigel Clarke told the country at a news briefing that the current contraction is not the result of structural factors, but rather, the inability of people and entities to move about freely to engage in economic activities, “as they normally would”, due to COVID-19 .

STATIN said that during the period all industries within the services industries declined with the exception of the producers of Government services, which grew by 0.1 per cent. There were declines to electricity and water supply by seven per cent; wholesale and retail trade; repairs; installation of machinery and equipment (8.1 per cent); hotels and restaurants (65.2 per cent); transport, storage and communication (14.8 per cent); finance and insurance services (5.6 per cent); real estate, renting and business activities (2.8 per cent); and other services by 27 per cent.

“The negative impact of COVID-19 and the measures implemented to limit its spread were felt more severely in the hotels and restaurants, transport, storage and communication and other services industries. There was an 81.8 per cent decline in stopover arrivals to the island and there were no cruise passenger arrivals for the period under review,” STATIN further said.

Within the goods-producing industries, the manufacturing and mining sectors saw declines of 10.9 per cent and 20.7 per cent, respectively. The agriculture, forestry and fishing, and construction industries, however, saw higher levels of output for the period, recording 2.5 per cent and seven per cent increases.

STATIN identified decreased output of 8.2 per cent and 14.6 per cent from the food, beverages and tobacco and the other manufacturing sub-industries as the main contributors to the decline in the manufacturing industry, noting also that suspension of production at the JISCO/Alpart refinery since September 2019 continues to negatively impact the performance of the mining and quarrying industry.

Despite the overall contraction for the quarter, STATIN said there was an 8.3 per cent increase in the economy for the third quarter of 2020, when compared to the previous quarter.

“This was the result of increases in both the services and goods-producing industries of eight per cent and nine per cent, respectively. This performance reflected the relaxation in some of the measures instituted in the second quarter of 2020 to limit the spread of COVID-19,” STATIN said.


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