The preliminary estimate of the damage caused by Hurricane Melissa, which slammed into south-western Jamaica on October 28 with cataclysmic effect, has been put at between US$6 billion and US$7 billion, or a staggering $1 trillion!

This has ripped out a significant 32 per cent of Jamaica’s gross domestic product (GDP) for fiscal year 2024/2025, according to Prime Minister Dr Andrew Holness.

He gave the preliminary estimate of the damage Tuesday during a lengthy ministerial statement in the House of Representatives in which he outlined the extent of the destruction brought by Melissa and what is expected to be a long road to recovery.

The prime minister emphasised that detailed damage assessments are still underway and that he was sharing the “very preliminary, high-level estimates only to illustrate the scale of the devastation”. He said the early dollar figure arrived at is based on benchmarks from comparable regional disasters; physical damage to housing, commercial buildings; roads, electricity, water, and telecommunications infrastructure.

Opposition spokesman on finance Julian Robinson highlighted that with Jamaica expected to receive the full payout of US$150 million from a catastrophe bond and a US$70 million catastrophe risk insurance bond, that would total only $35 billion compared to the $1-trillion damage estimate presented by Holness.

“Even with the relaxation of the fiscal rules — and you might have two to three per cent of GDP space — we still will have a significant shortfall,” said Robinson. He asked whether the Government had commenced discussions, negotiations, submissions, particularly with the International Monetary Fund that has a rapid funding facility “that would allow us to access money to deal with all the priorities that you spoke about and that the members have raised”.

According to the prime minister, Hurricane Melissa was not only a national tragedy, it was a warning.

“The storm’s 13-foot surge on our western coastline and up to 30 inches of rain in the central highlands revealed devastating power of a new climate reality. The era of a once-in-a-generation hurricane is over,” he said.

He spoke directly to fallout that has resulted from Melissa’s destruction, stating that, “It is clear that Hurricane Melissa will have a profound economic impact on our country. The storm struck the heart of Jamaica’s productive belt. It tore through our breadbasket parish of St Elizabeth; it disrupted our tourism corridor stretching from Westmoreland through St James and into Trelawny and St Ann; and it inflicted heavy damage on housing, community infrastructure, commercial operations, and public utilities across multiple parishes.

“Thousands of households now face the loss of homes, crops, equipment, and small enterprises. This is not only a humanitarian crisis — it is a shock to livelihoods, incomes, and local economies”.

Added Holness: “We anticipate a temporary slowdown in economic activity, particularly in the most affected parishes. Agricultural output will decline in the short term as farmers replant and livestock operations recover. The tourism sector, while resilient and working swiftly to reopen, will require targeted support to restore capacity and confidence. Small and medium-sized enterprises — especially those in retail, manufacturing, services, and the creative industries — have sustained significant losses and will need liquidity and recovery support to rebuild inventories, repair facilities, and restart operations.

“At the same time, supply chains for food, construction materials, and consumer goods are being actively restored, though some market disruptions may occur in the immediate weeks ahead. A very preliminary estimate suggests that short-term economic output could decline by eight to 13 per cent,” he told the House.

The prime minister pointed out that this means that revenues will decline as economic activity slows, even as expenditure must increase to finance emergency relief, recovery, and reconstruction.

“This will place pressure on our fiscal targets,” he said.

Meanwhile, Holness told the House that similar to how the Government operated during the COVID-19 pandemic, it will again activate the provisions under Section 48C of the Financial Administration and Audit Act, which allow for the temporary suspension of the fiscal rules in circumstances of national emergency or extraordinary economic disruption.

“We anticipate a rise in the debt-to-GDP ratio in the short to medium term as resources are channelled into rebuilding for resilience. Yet Jamaica’s record of disciplined fiscal management provides the credibility and space to respond decisively,” he stated.

He said the Administration’s focus remains clear — to restore livelihoods, protect the vulnerable, and ensure that Jamaica emerges from this crisis stronger, more resilient, and more competitive than before.

“However, it is also important to state that restoring economic activity must proceed alongside relief and restoration efforts. This is not insensitivity — it is a necessity. Reviving production, reopening tourism, and restarting commerce are essential to restore incomes, rebuild confidence, and mitigate the wider economic shock. Recovery is not just about clearing debris — it is about getting Jamaicans back to work and our economy back on its feet,” the prime minister said.

“We are already activating the fiscal and financial instruments available to us and engaging our international development partners to support the recovery effort. Cash-flow support to households, emergency social programmes, concessional financing, and targeted industry assistance will form part of a responsible and disciplined economic response,” the prime minister said.

The Ministry of Finance, he said, will provide further details to the Parliament as assessments are completed and funding packages finalised from Jamaica’s multilateral and bilateral partnerships.