Jamaica Economic Forecast

Jamaica Economic Outlook

October 11, 2021

Economic growth came in at 14.2% in Q2, rebounding from Q1’s 6.7% contraction, in part due to a base effect. Nonetheless, the economy still expanded 2.4% in quarter-on-quarter terms (Q1: +0.6% qoq), with the services sector performing particularly well amid fewer Covid-19 cases. Moreover, private consumption was likely supported by rising remittances, which came amid a tighter U.S. labor market. However, prospects likely worsened in Q3: A third Covid-19 wave hit the country in mid-July, leading to tighter restrictions, including a series of lockdowns from late August. More promisingly heading toward Q4, a fall in cases permitted the government to slightly ease restrictions in mid-September, while in early October S&P Global Ratings revised the country’s outlook from negative to stable, on the back of fiscal consolidation efforts and the institutionalization of the Central Bank’s independence.

Jamaica Economic Growth

The economy is forecast to recover somewhat this year from 2020’s downturn, with the gradual easing of restrictions at home and abroad fostering stronger domestic and foreign demand, respectively. Heading into 2022, growth should pick up amid the receding impact of the pandemic, although fresh Covid-19 waves pose a downside risk. The panel sees the economy expanding 3.6% in 2021 and growing 4.5% in 2022, which is unchanged from last month’s estimate.

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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