Jamaica: Economy to contract as a result of Hurricane Sandy – BoJ

The Jamaican central bank is projecting that the economy will contract in the current quarter as a result of the negative impact of Hurricane Sandy.

Bank of Jamaica (BoJ) governor, Brian Wynter, told the bank’s quarterly briefing Wednesday morning that this will result in economic output in the December quarter contracting between point seven and minus 1.7 percent.

Wynter says the negative outlook is influenced by preliminary estimates of the damage caused by the Hurricane on both the Jamaican economy and the East Coast of the United States:

“The domestic impact of Hurricane Sandy is substantial, as sharp decline in projections for activity in agriculture forestry and fishing. The impact on mining and quarrying would be also registering a sharper decline than we originally expected due to the closure of the bauxite plants.”

In addition, the electricity and water supply sector is also expected to decline, given the disruption of supply services.

The hotel and restaurants category is also expected to contract, in anticipation of cancellations in stop-over arrivals, as well as the diversion of cruise lines during the period of the hurricane.

And, there is more negative news for the economy, as the bank of Jamaica estimates suggest that performance of the economy in the September quarter continued to reflect the impact of weak domestic demand, as well as slower growth in the global economy.

The only industry which recorded growth in the September quarter was hotel and restaurants.