KINGSTON, Jamaica — The deleterious effects of Hurricane Melissa continued to weigh heavily on the Jamaican economy, with gross domestic product (GDP) contracting by 5.9 per cent during the first quarter of this calendar year, according to preliminary estimates released by the Planning Institute of Jamaica (PIOJ)

The powerful Category 5 hurricane, which struck the island last October, significantly affected economic performance as it left goods-producing and services industries declining by 11.2 per cent and 4.1 per cent, respectively.

The institute shared that the mining sector suffered the largest impact, contracting by 26.6 per cent, followed by agriculture at 20.3 per cent, manufacturing at 7.7 per cent and construction, which fell by 1.3 per cent. The usually dominant accommodations and food services or tourism sector also experienced a sharp downturn of 20.4 per cent, negatively impacted by a 17 per cent fall in visitor arrivals and a 27.5 per cent reduction in total stopover arrivals. Total visitor expenditure for the period declined by 21.3 per cent, amounting to US$976.4 million.

“The hurricane’s impact was further compounded by weakened demand, largely reflecting the intensification of geopolitical tensions in the Middle East, which disrupted supply chains, drove up energy prices, and curtailed trade flows, thereby dampening external demand,” PIOJ Director General Dr Wayne Henry said during a quarterly briefing this morning.

For fiscal year 2025/26 real value added for the local economy also declined by 1.6 per cent.

“This revised projection compared with an initial projection for growth of 1.9 per cent indicating that the shock of Hurricane Melissa resulted in a loss of 3.5 percentage points in real value added output for FY2025/26,” Henry added, while noting that if global oil prices remain elevated for an extended period, Jamaica could face significant economic challenges.

Noting that short-term prospects remain generally negative, Henry said the economy is expected to contract further by 3–4 per cent in the April–June quarter. However, he emphasized that these projections are contingent on several factors, including the continuation of tensions in the Middle East, which pose an adverse risk, or more favorable weather conditions, which could accelerate recovery.

Notwithstanding the challenges, Henry said the expectation is for the economy to grow within the range of one to three per cent for FY 2026/27 tied to anticipation for there to be faster growth during the latter half of the current fiscal year.

Factoring the easing of declines seen quarter over quarter and steady recovery across some sectors, Henry also said there is no immediate threat of a recession to the Jamaican economy at this time.