Jamaica’s economic recovery accelerated in the second quarter of this year (April to June), with the Planning Institute of Jamaica (PIOJ) estimating that output expanded by 12.9 per cent.

Dr Wayne Henry, director general of the PIOJ, said the growth stemmed from significant increases in economic activities as well as the roll-out of the global vaccination programmes. On this basis, it is estimated the economy could return to pre-COVID-19 levels by 2024 after an 11 per cent fallout last year.

Henry made the disclosure about the recovery yesterday at the PIOJ’s press briefing at which he reviewed the previous quarter and gave a forecast for the quarters ahead. He said between April and June, the goods producing sector expanded output by 7.8 per cent with positive out-turns from construction activities, which went up by 18.3 per cent. Agriculture, though reeling now from the impact of Tropical Storm Grace, expanded by 10.3 per cent between April and June while manufacturing grew by 3.1 per cent. The mining and quarrying sector, however, declined by 12.3 per cent due to some ongoing technical issues. “The timing of recovery in this industry remains uncertain as the necessary assessments of damage [from the Jamalco fire] are ongoing,” Henry stated.

The services industry also showed positive increases, expanding by 14 per cent due to strong performances in sectors such as hotel and restaurants, which went up by 330.7 per cent, other services (50 per cent) and transport, storage and communication up 16.5 per cent. “The preliminary data presented on performance for the April-June quarter indicates that the economy has begun to show signs of economic recovery following the devastation caused by COVID-19 in FY 2020/21. The robust growth out-turn recorded in the review quarter largely reflected the partial recovery from the low base in the corresponding period. It is anticipated that this growth momentum will provide a fillip to the economy in driving more robust growth in the medium term based on the simultaneous and ongoing build out of capacity currently being undertaken in some industries such as business process outsourcing (BPO), hotels, manufacturing, etc, ” Henry stated.

He outlined that a third wave of the coronavirus disease stemming from the more aggressive Delta strain now present on the island, along with the associated tightened restrictions to curb the spread will not significantly dampen the positive out-turns expected to come from economic performance for July-September. Henry said the forecast is that the expansion will continue, though not at the levels recorded for the April to June period. The expectation for July to September is for growth to be in the range four to six per cent. During the same quarter last year, the economy contracted 10.7 per cent.

“This projection is based on expected growth in most industries led by the services industry in particular hotels and restaurants, other services, transport, storage and communication. Early indicators are positive as reflected in hotels and restaurants with a sharp increase in preliminary airport arrivals up by 304.8 per cent to a 169,782 persons for the month of July,” Henry said.

“It is anticipated that for all quarter of fiscal year (FY) 2021/2022, the country will recall higher levels of output relative to the subdued performance for the FY 2020/21 due to the restrictions caused by COVID-19,” he added.

The entity in its outlook said it was also anticipating further growth in output of some six-10 per cent for the full fiscal year, a slightly upgraded estimate, up from the seven-nine per cent projected earlier this year.

“It should be noted, however, that the economy is not expected to attain pre-COVID gross domestic product (GDP) levels until FY 2023/24 while pre-COVID employment levels should be attained in FY2022/23,” Henry added, noting that despite some tempering in the medium term which may come from varying factors including plant downgrades affecting output, a recent fire at the Jamalco aluminum plant, adverse weather, the spread of the new Delta variant and the challenges in achieving herd immunity — projections for growth remains positive based on continued economic recovery in most industries along with the gradual restoration of global economies.

“The recent implementation of no movement days will temper some economic activities but given its relatively short duration, the negative impact is not expected to be significant,” the director general also stated.