Jamaica Economic Forecast

Jamaica Economic Outlook

November 10, 2020

The economy likely remained in the doldrums in Q3 amid the fallout from the global pandemic, after contracting sharply in Q2. Another steep drop in merchandise imports in July points to still-weakened domestic demand at the start of the quarter. Moreover, private consumption should have remained downbeat in Q3 overall as some containment measures remained in place, which likely also weighed on capital expenditure. In addition, tourist arrivals continued to fall sharply through September. On the other hand, remittances continued to grow sturdily in July after surging in June, which should have provided some support to household spending. Turning to the fourth quarter, prospects are less gloomy, although the recent resurgence of new Covid-19 cases globally suggests the external sector could feel the pinch from lower trade levels and still-muted tourist inflows.

Jamaica Economic Growth

The economy will suffer a steep contraction this year due to Covid-19, but is set to rebound next year as both domestic and foreign demand strengthen. However, the balance of risks remains tilted to the downside due to the closure of the Alpart alumina refinery and uncertainty over the pandemic: Further waves of the virus could lead to tightened restrictions. The panel sees the economy expanding 3.9% in 2021, which is up 0.6 percentage points from last month’s estimate, and growing 3.0% in 2022.

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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