Jamaica’s economy contracts 9.4% during Oct to Dec 2020

Jamaica Observer | Jamaica’s planning institute (PIOJ) has revealed that the country’s economy declined by 9.4 percent during the third quarter (October to December 2020) as compared to the corresponding period in the previous year.

The economy had previously contracted by 10.7 percent in the July to September quarter according to data from the Statistical Institute of Jamaica (STATIN).

Speaking at a quarterly briefing this morning, Wayne Henry, Director General of the PIOJ, said that the continued impact of the COVID-19 pandemic and its imposed restrictions continue to negatively affect the economy along with the prospects for GDP (gross domestic product) growth.

During the period, preliminary estimates reflected that the goods producing industry contracted by 0.6 percent and the services industry by 11.5 percent.

There were also wholesale contractions across some major sectors such as agriculture, which declined by 6.1 percent, manufacturing by 3.4 percent and hotels and restaurants – under which tourism falls – by 52.8 percent.

More positive results were presented for other key sectors such as mining and quarrying, which went up by 6 percent and construction by 6.2 percent.

The PIOJ, in its outlook for the current January to March quarter, however said that the economy is expected to contract within the range of 7 to 9 percent.

“If this forecast is realized, it will represent the smallest rate of quarterly contractions for fiscal year 2020/21 and may be indicative of a gradual return to normalcy in economic activities relative to the preceding quarters,” Henry said.

The entity said that while growth is expected to resume during the first quarter of this year, it maintains current projections that the country will not return to its pre-COVID-19 level of output until the next 3 years or by fiscal year 2023/24.