The Planning Institute of Jamaica (PIOJ) in its latest preliminary data on gross domestic product (GDP) performance has estimated growth of 5.7 per cent during the April-June quarter.

Director general of the PIOJ Dr Wayne Henry, speaking at a quarterly briefing on Thursday, said that growth was largely influenced by the continued removal of COVID-19 containment measures, increases in agricultural output, improvements in the markets of main trading partners along with improved consumer confidence and employment.

The dominant services sector which grew by 7.7 per cent benefited from higher real value added across all industries. The hotels and restaurant industry accounting for the lion share of growth in the sector recorded outturns of 55.4 per cent, largely driven by sharp increases in visitor arrivals from major source markets. According to data presented, foreign national arrivals from April to May amounted to 399, 310 visitors — an increase of 110 per cent. Other industries recording strong growth across this sector were other services, up 25 per cent, transport, storage and communication, up 10 per cent as well as wholesale, retail trade and repairs and installation of machinery, up 5.8 per cent.

“The improved performance largely reflects the strength of the continued recovery following the low levels of output recorded for the corresponding quarter of 2021 when some of the COVID-19 restrictive management measures were still in effect,” Henry said, contextualising the quarter’s performance against a backdrop of $1.7 billion in fiscal surplus and a 1.1 per cent quarterly inflation rate.

On the other hand plant downturns, aged equipment and other production disruptions, however, stymied growth for the goods producing industry, which declined by 0.4 per cent. This, following steep contractions of some 60.6 per cent in mining and quarry activities which continue to be adversely impacted by the closure of the JAMALCO alumina plant in Clarendon after a fire last year. Operations at the plant are however expected to resume during the latter part of this fiscal year. A 4.2 per cent contraction of real value added in the construction industry as a result of little activity in the ‘other construction’ component, further affected outturns for the sector.

Despite growths of 2.8 per cent and 12.6 per cent within the manufacturing and agriculture sectors respectively, these were still not enough to outweigh higher levels of downturns seen across the sector over the period.

“The preliminary data presented on performance for the April-June 2022 quarter indicate that the process of recovery from the pandemic has continued. The strength of recovery in the domestic economy has eclipsed the impact on growth posed by the challenge in the global economy, including supply chain disruptions,” Henry further said while dismissing talks of a likely recession.

He also noted growth of 6.1 per cent for the first half of this year, with growth in the services industry at 8.1 per cent even as the goods producing industry remained flat. “The industries which were estimated to have recorded the largest increases during the first half of the year were hotels and restaurants— up 75.4 per cent; other services — up 18.2 per cent and agriculture — up 10.5 per cent.

Maintaining a positive outlook, Henry said his projection for the short term was for the economy to continue on a growth trajectory. He estimated growth within the range of 2-3 per cent for the current July-September quarter, given a continuation of recovery efforts, reopening of the JAMALCO plant, improved labour market outturns and a strengthening of the global economy, supported by a restoration in global supply chains in key areas such as energy and grains.

“Current projections are that for all quarters of FY2022/23, the country will record higher levels of output relative to the subdued performance in FY2021/22.

“Consequently, the PIOJ’s projection is for growth in output within the range of 3-5 per cent for the full FY2022/23. It must however be noted that the economy is not expected to attain pre-COVID GDP levels until FY2023/24,” Henry stated.