Jamaica Economic Forecast

Jamaica Economic Outlook

June 14, 2022

Growth clocked 6.0% year on year in Q1 2022 according to the Planning Institute, despite the Covid-19 outbreak early in the year. The services sector led the expansion. Meanwhile, the unemployment rate reached a record low. Additionally, tourist arrivals recovered, with March arrivals reaching around 60% of their pre-pandemic level. That said, mining output tumbled year on year in Q1 on the closure of the Jamalco alumina refinery. Turning to Q2, Covid-19 restrictions for travelers were fully removed in April, boding well for visitor arrivals. Nonetheless, soaring inflation and rising interest rates are likely denting investment and consumption. In May, strikes hurt Jamaica’s public sector amid government plans to cut the number of public agencies. Such strikes could continue ahead as workers’ demands seem incompatible with the government’s limited financial resources.

Jamaica Economic Growth

Economic growth should remain relatively solid this year thanks to growth in exports of services amid a recovering tourism industry. However, a tight fiscal stance, and higher interest rates and commodity prices, are set to limit momentum. Concerns over public debt levels, natural disasters and new Covid-19 variants given low vaccination rates are downside risks. The panel sees the economy expanding 3.4% in 2022, which is unchanged from last month, and growing 2.78% 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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