THE Planning Institute of Jamaica (PIOJ) expects the island to post growth up to 1.5 per cent in the December quarter which would offset contractionary drought conditions three months earlier.

The growth would allow the country to avoid a recession.

“Prospects for growth within the upcoming October to December period remain positive, with real GDP expected to grow within the range of 0.5 per cent to 1.5 per cent,” the PIOJ said in its quarterly briefing statement.

The PIOJ indicated that the December growth would complement the continued strengthening of confidence levels, the International Monetary Fund (IMF) support, as well as a possible rebound within the agriculture industry.

The country recorded a contraction of 0.8 per cent in the September quarter based on drought conditions. It followed on four consecutive quarters of growth recorded since July – September 2013.

“Drought conditions prevailed during the months of June and July 2014 and adversely affected the performance of some industries, particularly, agriculture and electricity and water,” the PIOJ said, adding that the average rainfall levels for the months of June and July 2014 were 32.4 per cent and 36.8 per cent of the 30-year mean, respectively.

Real GDP for the agriculture, forestry and fishing industries declined by an estimated 21 per cent as drought curtailed planting and resulted in lower crop yields. All parishes, with the exception of Trelawny and St James, recorded lower levels of hectares reaped.

Over the next three years, Government expects baseline growth in the economy to remain relatively low at 1.1 per cent, 1.7 per cent, and 2.1 per cent, respectively, as outlined in the Fiscal Policy Paper FY2014/15 Interim Report. The PIOJ, however, indicated that these growth targets require the implementation of projects and further reforms to achieve success.

Key reforms to business conditions started a year ago based on IMF conditionalities. In October, the World Bank announced that Jamaica rocketed up the ranking in the prestigious Doing Business Report for 2014, from 85th to 58th in the world. The main areas of improvement in the rankings related to the ease of ‘Getting Credit’ up 113 places and ‘Starting a Business’ up 14 places.