While the rate of growth in the economy at 0.6 per cent for the year may be less than desired, “We are moving in the right direction,” according to Minister of Finance Nigel Clarke, speaking at the opening of the 2020-21 budget debate in Parliament yesterday.

“Let me start with the fact that the Government is dissatisfied with the level of economic growth of 0.6 per cent, likely to be recorded for 2019/20,” Clarke said.

He noted that almost every sector has been growing for the last 19 quarters, with the two main problem areas being the mining and agricultural sectors.

At the start of this financial year, the Government projected economic growth of 1.5 per cent, factoring in a slowdown at the JISCO/Alpart alumina plant in St Elizabeth.

But that was not to be, as Clarke noted that during the course of the year, the Governmet was disappointed to be informed by JISCO that they would be closing their plant for 24 months for repairs and upgrade.

“Given the financial value of the output of the JISCO/Alpart plant and the weight of its contribution to economic growth, its closure led to an immediate downward revision in growth for this year,” Clarke said.

“It should be clear, Mr Speaker, that had this single event not occurred it is likely that annual growth target would have been met.” He noted that it should also be clear that GOJ policy would not have impacted on the dynamics that led to this decision by JISCO — an event that had an external origination and cause. “It is what is called an external economic shock,” he said.

That closure meant the mining sector declined by 17.6 per cent for the third quarter, and by another 38.7 per cent for the fourth December quarter.

BUBBLING UP

“The real news is that the economy actually still grew despite this,” Clarke said, and only occurred because other sectors “are bubbling up”.

He noted that even with the lower estimated growth, the economy should grow for the upcoming quarter, meaning 20 consecutive quarters of continual growth — the longest period of growth since the Government started measuring quarterly growth in 1997 according to Clarke.

The finance minister noted that tourism had grown for all 16 quarters of the current Administration, as had the transport, storage & communication sectors and the real estate, renting and business activities, and other sectors.

Meanwhile the wholesale & retail/repairs/installation of machinery & equipment sectors have grown for every quarter of this Administration with the exception of one, while manufacturing had grown for 13 of those quarters.

Construction came in for special mention, as Clarke noted that, “Private construction is booming, quite evidently. Not in over 30 years has there been so much construction happening at the same time.”

“We have to create a new vocabulary for the crane dem,” Clarke said, listing several new types of cranes involved in the construction industry.

Overall, growth was better last year, however, as Clarke noted that in the previous financial year, Jamaica had grown at an annual rate of two per cent, which was the highest rate of economic growth in Jamaica for 12 years.

GROWTH LEADER

Additionally, although growth has been low, Jamaica has been leading the wider region in growth for the last four years.

“Jamaica’s economic growth over the past four years has been higher than average economic growth in all of Latin America and the Caribbean in each of these years,” Clarke said, adding, “Commodity price weakness and global trade tensions have been impacting growth not only in Jamaica but across Latin America and the Caribbean.”