Jamaica Economic Forecast

Jamaica Economic Outlook

January 18, 2022

Growth slowed in Q3 in both year-on-year and seasonally-adjusted month-on-month terms in both the services and goods industries. This was likely due to the third Covid-19 wave in July, which led to a number of lockdowns from late August. Indeed, the contact-heavy hotels and restaurants sector suffered an especially significant slowdown. In Q4, growth was likely supported by falling Covid-19 cases which allowed looser restrictions from September. Moreover, remittance growth averaged higher in October than in Q3, although tourism activity ebbed somewhat in October on U.S. advice against travel to the country. Looking to the current year, a record case surge in January amid the global outbreak of Omicron is likely dulling momentum in Q1. While the government has ruled out new lockdowns, pointing towards vaccination as the solution, the low inoculation rate could force fresh restrictions ahead.

Jamaica Economic Growth

Growth should be fairly steady this year. An eventual easing of the pandemic should boost visitor arrivals, but limited fiscal space will restrict the government’s scope to support consumption. Tighter monetary policy will further dampen demand. The Omicron variant poses a large risk to activity, especially given the country’s low vaccination rate. The panel sees the economy expanding 4.0% in 2022, which is down 0.3 percentage points from last month, and growing 2.7% in 2023.

Jamaica Economy Data

2015 2016 2017 2018 2019
Population (million)2.82.82.82.92.9
GDP per capita (USD)5,0424,9765,2065,4945,536
GDP (USD bn)14.214.114.815.715.9
Economic Growth (GDP, annual variation in %)0.91.41.01.90.9
Consumption (annual variation in %)-0.10.11.10.7-  
Investment (annual variation in %)-4.80.14.65.7-  
Unemployment Rate13.513.211.69.17.7
Fiscal Balance (% of GDP)-0.3-0.20.51.20.2
Public Debt (% of GDP)12211410194.4-  
Money (annual variation in %)13.413.42.89.89.5
Inflation Rate (CPI, annual variation in %, eop)3.71.75.22.46.2
Inflation Rate (CPI, annual variation in %)3.72.34.43.73.9
Policy Interest Rate (%)0.253.003.251.750.50
Exchange Rate (vs USD)120.0128.9124.5127.4132.0
Exchange Rate (vs USD, aop)116.7125.2128.3129.1133.2
Current Account (% of GDP)-3.0-0.3-2.6-1.8-2.0
Current Account Balance (USD bn)-0.40.0-0.4-0.3-0.3
Trade Balance (USD billion)-3.8-3.4-4.2-4.2-4.8
Exports (USD billion)1.31.21.42.01.6
Imports (USD billion)5.04.65.56.26.3
Exports (annual variation in %)-13.4-5.313.746.4-19.8
Imports (annual variation in %)-13.9-8.219.811.42.7
International Reserves (USD)2.93.33.83.53.6
External Debt (% of GDP)99.510099.4104-  

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