Jamaica Economic Forecast

Jamaica Economic Outlook

September 15, 2020

The economy likely suffered due to Covid-19 and associated containment measures in Q2. Household spending should have taken a hit as restrictions remained largely in place during the quarter, while general uncertainty will have weighed on business outlays. A marked contraction in merchandise imports, meanwhile, highlighted slack domestic demand. The important tourism sector also took a hit, with virtually no tourists visiting in the quarter. Turning to Q3, tourist arrivals were still down significantly in July despite the reopening of borders in mid-June. Against this background, snap elections were held on 3 September, in which incumbent Prime Minister Holness’ JLP party won a landslide victory. As such, policy is unlikely to shift significantly, although new measures to curb the spread of Covid-19 were announced on 7 September, including a stricter daily curfew and tighter limitations on social gatherings.

Jamaica Economic Growth

The economic outlook is grim as GDP is expected to fall sharply this year, due to the global health crisis and the closure of the Alpart alumina refinery. The pandemic and associated containment measures will weigh heavily on domestic activity, exports and tourism. However, international financial support and fiscal stimulus should soften the fall somewhat. The panel sees the economy contracting 6.2% in 2020, which is down 0.1 percentage points from last month’s forecast, before growing 3.1% in 2021.

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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