The Planning Institute of Jamaica (PIOJ) is seeking to set the records straight regarding the latest data on poverty in the country, showing a 2.2 per cent jump in 2017 to 19.3 per cent of the population living below the poverty line.

PIOJ Director General Dr Wayne Henry says the increase in poverty was due to more people in the Kingston Metropolitan Area (KMA) and other towns living below the poverty line. With regards to the rural areas, the figure was flat at zero.

“The increase in poverty was driven mainly by lower consumption levels in real terms, especially for individuals in Quintiles 1 and 2, which consist of the two poorest households, compared with 2016. Households in the wealthiest quintile increased their consumption over the same period, this contributed to an increase in consumption inequality,” Dr Henry stated.

Speaking at the PIOJ’s quarterly news briefing on Monday (August 26), Dr Henry added: “The decline in consumption in real terms may be attributed in part to a decline in the proportion of households in the KMA and other towns receiving remittances from abroad. In addition, during the period March to June 2017, the island experienced adverse weather conditions, which affected the outputs of several industries.”

Concerning regional distribution, there were increases in the KMA of 5.2 percentage points to 17.1 per cent, reflecting a decline in mean per capita consumption in real terms by 3.0 per cent, and other towns, which recorded a 4.1 percentage point increase to 20.1 per cent.

“The increased prevalence of poverty recorded for other towns is the second consecutive year of increase and highlights a worsened standard of living in the region. In terms of consumption, the region recorded a 4.2 per cent decline in real mean per capita consumption expenditure,” the PIOJ boss emphasised.

The poverty rates in rural areas, on the other hand, remained relatively unchanged to register 20.1 per cent when compared with the 20.5 per cent in 2016.

When analysing the poverty out-turn for 2017, Dr Henry stressed that it must be noted that election activities in 2016 may have played a role in stimulating consumption, thereby influencing the reduction in poverty for 2016.

He made the point that it is an observed trend that poverty rates in Jamaica generally decline during an election year, reflecting the impact of the additional expenditure by campaigning political parties.

“For example, in 1993, which was an election year, was accompanied by a 9.5 percentage point decrease in the poverty rate relative to the previous year.

“Similarly, for election years, 1997 and 2007, the poverty rates dipped by 6.2 percentage points and 4.4 percentage points, respectively.”

Dr Henry observed that the anomaly shown in 2002, where the poverty rate increased in that election year, reflected the impact of severe shocks to the agriculture industry, which negatively impacted rural poverty rates.

Agriculture, which accounted for 7.0 per cent of GDP in 2017, contracted by 3.5 per cent in real terms, being heavily impacted by above-average rainfall across the island.

Dr Henry explained that “due to the country’s high dependence on output from the agricultural sector, the poverty rates are normally influenced by the performance of this sector. This influence was seen in the increase in the prevalence of poverty in the KMA and other towns. However, due in part to the impact of the Flood Recovery Programme in rural areas, the rates in the region remained relatively unchanged.”

Another explanation for the increase in poverty in 2017 was the fact that there was a decline in the proportion of households receiving remittances from abroad. Therefore, transfers, as measured by remittances, declined significantly for poorer households in Quintiles 1 and 2 in both the KMA and other towns.

The inflation rate was 5.2 per cent in 2017 compared with 1.7 per cent in 2016. This, according to Dr Henry, “indicated that households faced higher prices to maintain the same standard of living. The increase in prices faced by consumers stemmed primarily from an increase in energy prices and a shortage of domestically produced food, due to extensive damage from flood rains.”

The PIOJ director general also sought to explain the lag in the data coming in 2019 for 2017. He said the delay was based on the lateness of data coming in for analysis and presentation.