With much talk globally of an impending recession, director general of the Planning Institute of Jamaica (PIOJ) Dr Wayne Henry is of the view that economic prospects for the current financial year remains positive.

He noted that the growth trend is expected to continue for the rest of the year within the range of 0.5 – 1.5 per cent, and for fiscal year 2019/20 growth within the range of 1.0 – 2.0 per cent is being projected.

Speaking at the PIOJ’s quarterly briefing held on Monday last (August 26) to review the country’s economic performance for the April- June 2019 period; the director general of the country’s main planning agency reasoned that while some analysts worldwide have started to predict that we may see signs of a global recession by 2021 the outlook remains positive as global authorities have started to apply aggressive monetary policies and strategies where necessary.

He added that recessions are marked with periods of negative growth and all projections still indicate that whereas growth in Jamaica has slowed in some areas, it remains positive.

Dr Henry, in referencing the International Monetary Fund’s (IMF) most recent world economic outlook (July 2019) pointed out that global growth has only been “revised downwards by 0.1 percentage point to 3.2 per cent, and is expected to rise by 3.5 per cent in 2020”.

He further asserted that whereas chances of a recession have become likely, there are several mitigating factors that the country will move to undertake in a bid to cushion the potential effects.

He noted that at the industry level, retooling and training must be be employed to improve productivity and competitiveness.

“It has been demonstrated that the most competitive companies are usually better equipped to withstand the challenges arising from a recession. During the 2007/08 global economic crisis, [the]Jamaican hotels and restaurants industry was viewed as an anomaly when compared with other regional destinations. The tourism sector was able to record consistent growth throughout the crisis period, albeit with some level of price discounting,” he shared.

This for him underscores how important competitiveness is to mitigating the impact of recession.

He also called for a strengthening of domestic linkages to minimise the adverse impacts of weakened external demand.

“Efforts are already ongoing in the agriculture, manufacture and the hotels and restaurant industries to strengthen inter-sectoral industries and reduce dependence on imports,” the PIOJ head revealed.

Dr Henry noted that the intensity of any global recession is usually exacerbated by policy uncertainty and as such, urged policymakers to be more critical in ensuring that there is certainty surrounding policies related to external trade and other macroeconomic fundamentals.

“Key areas of focus include the continued strengthening of the macroeconomic environment; efforts should continue to focus on ensuring that fiscal and monetary policies continue to foster an environment conducive to growth and investments. Additionally, sustaining the pace of debt reduction and ensuring adequate levels of non-borrowing reserves are critical to providing the necessary buffers required to withstand economic shocks,” Dr Henry articulated.

Outside of these factors the PIOJ head listed other measures, such as the provision of social safety nets, which should be created for the vulnerable segments of the population — especially those close to or under the poverty line.

“This involves enhancing the efficiency in spending, the rationalisation of resource allocation and improving the targeting mechanism”, he said.

In closing, he called for the facilitation of investments and trade policies which seek to encourage the diversification of products and markets.