Jamaica: Economy contracts by 0.3 percent in 2012

The latest numbers released by the Planning Institute of Jamaica (PIOJ) have revealed that the economy of the island-nation contracted by an estimated 0.6 percent in the period October to December 2012, which translates to a 0.3 percent decline in real gross domestic product (GDP) for the year 2012.

The contraction in the economy is attributed to a weak global economic environment, adverse weather conditions – the prolonged effect of drought which affected the productivity of crops, continued weak domestic demand conditions heavily influenced by weak business confidence and losses and damage caused by Hurricane Sandy in October, Acting Director General of PIOJ Everton McFarlane said.

The Jamaica planning institute further reported that there was a fiscal deficit of J$16.7 billion (US$176 million) during the same period (Oct. – Dec. 2012), which amounted to more than the J$6.7 billion (US$71 million) budgeted. This was attributed to revenue being J$7.9 billion (US$83 million) lower than programmed, which it said was tempered by a J$1.2 billion (US$12.6 million) lower-than-budgeted expenditure.

Inflation rose up a notch during the same period, to 2.6 percent. The increase mainly to increased fuel and food prices.

Unemployment held steady at 13.7 percent.

It is projected that there will be growth in 2013 – though sluggish, and real GDP growth is estimated with the range of zero and one percent for the period January to March 2013.