THE continued recovery of the local economy has resulted in growth of some 4.3 per cent for the previously ended July–September quarter when compared to that of last year, according to preliminary data released by the Planning Institute of Jamaica (PIOJ) yesterday.
Director general of the PIOJ Dr Wayne Henry, in a media briefing on Wednesday, said that the latest out-turns which fuelled increases of 3.2 per cent and 4.7 per cent in the goods-producing and services industries, respectively, was also influenced by a removal of COVID-19 containment measures globally, higher levels of employment, and increased productivity.
The goods-producing industry benefited from growth in agriculture of 15.4 per cent and manufacturing at 3.5 per cent but was also impacted by decreases in the mining and construction industries — down 30.4 per cent and 2.2 per cent, respectively. Both sectors suffered from the effects of reduced activity.
The strong recovery of the services industry was driven by real value-added across all eight of its subsectors, particularly the dominant hotel and restaurants division which went up by 29.6 per cent.
"Stopover visitor arrivals for July-August 2022 increased by 42 per cent relative to the corresponding period of 2021. Stopover arrivals for August was 218,849, representing the highest on record for any August and signals a return to pre-COVID monthly arrival levels. Cruise passenger arrivals totalled 156,609 in July-August 2022, relative to 3,496 in the corresponding period of 2021," Henry noted.
Preliminary data on airport arrivals for October further show an increase of 52 per cent above the prior year's figures.
"Visitor expenditure was estimated to have increased by 49.5 per cent to US$692.8 million for July–August 2022 relative to that of 2021," he added.
Total real value-added for the first nine months of this year (January-September) also increased to 5.2 per cent, led by positive out-turns of 0.6 per cent in the goods-producing industry and 6.7 per cent for the services industry. Growth for the period was mainly driven by hotels and restaurants, up 58.2 per cent, and agriculture, up 9.8 per cent.
Notwithstanding the downside risks stemming from some local and global challenges, including a tightening of monetary policy resulting in rising inflation and increased interest rates, supply chain disruptions owing to the Russia/Ukraine war, adverse weather conditions, and a downgrading in forecasts by international organisations such as the International Monetary Fund (IMF), Henry said the outlook for the economy remains relatively positive even as the PIOJ's projection remains fluid in light of the threats.
He however said that it is the PIOJ's belief that the impacts from the removal of the previously implemented COVID-19 containment measures will continue to support an expansion of economic activities in most industries, especially as increased employment levels fuel greater domestic demand in the short to medium term.
"The resumption of production at the Jamalco alumina refinery and a gradual ramping up of its capacity utilisation are expected to result in relatively stronger growth in the mining and quarry industry over the short term," Henry said.
To this end, the PIOJ in a short-term outlook also projected growth within the range of 2.5–3.5 per cent for the current October–December quarter, and growth of 4.0–5.0 per cent for the 12 months of 2022.
"For fiscal year 2022/23 the projection is for growth within the range of 3.5–4.5 per cent. Generally, the indications are that the economy will continue its growth trend within the short term, albeit at a slower rate and as more industries attain pre-COVID-19 levels of output.
"During the medium term the expectation is also that inflation will gradually recede, easing the burden on Jamaican households. In this environment it is important that monetary policy focuses on measures aimed at guiding inflation towards the target range while fiscal policy focuses on strengthening public finances, supporting growth-inducing initiatives and reforms, while protecting the most vulnerable population from the inflation shock," the director general said.