Jamaica’s Economic Growth Projected in the Range of 1.5 To 2.9 % Over the Next Four Fiscal Years.
Economic growth is projected in the range of 1.5 to 2.9 per cent over the next four fiscal years.
This is according to the Government’s 2019/20 Fiscal Policy Paper, which was tabled in the House of Representatives on February 14, by Finance and Public Service Minister, Dr. the Hon. Nigel Clarke.
The document indicates that growth of 1.5 per cent is projected for 2019/20, and identifies Agriculture, Forestry and Fishing; Hotels and Restaurants; and Mining and Quarrying as the main sectors which will drive this outturn.
Agriculture, Forestry and Fishing is expected to grow by five per cent, spurred by increased demand, especially from stronger linkages between the Hotels and Restaurants sector, and Manufacturing industry (via agro-processing).
“This will be supported by measures to strengthen the resilience of the Agriculture, Forestry and Fishing industry, as the effect of climate-smart technology begins to have greater impact,” the document outlines.
Hotels and Restaurants is projected to grow by four per cent, led primarily by increased visitor arrivals associated with continued growth for the island’s main trading partners.
This, according to the Policy Paper, is expected to be facilitated by increased flight frequency, room stock and heightened marketing efforts in new and existing markets.
Mining and Quarrying is projected to grow by two per cent, due to increased capacity utilization consequent on heightened global demand for aluminium.
However, the document notes that disruptions at the Alpart refinery in Nain, St. Elizabeth of between three to six months could occur, as planned upgrades of the production chain are implemented.
“If the risk of the Alpart alumina refinery closing for six months materialises in 2019/20, real GDP is projected to grow by 1.3 per cent instead of the baseline forecast of 1.5 per cent,” the Policy Paper outlines.
Meanwhile, the growth projection for 2020/21 is 2.9 per cent, reflecting increases in both the Goods Producing and Services industries, with Mining and Quarrying; Agriculture, Forestry and Fishing; Hotels and Restaurants; and Manufacturing identified as the principal drivers.
Mining and Quarrying is expected to grow by 36.9 per cent, spurred by increased capacity following the installation of key equipment at Alpart, as well as increased capacity utilization at other refineries in response to growth in global aluminium demand.
Agriculture, Forestry and Fishing is projected to grow by five per cent, consequent on increased use of technology aimed at building the industry’s resilience to shocks.
Import substitution and increased linkages with the other industries have been identified as the main drivers.
Increased foreign national arrivals resulting from global economic growth and increased room stock, marketing and greater frequency of flights into Jamaica are the factors expected to spur projected growth of 4.5 per cent in the Hotels and Restaurants subsector.
Growth of 2.2 per cent for Manufacturing is expected to be derived from increased domestic and international demand for Jamaican goods.
“Increased linkages with other industries as well as improved capacity and efficiency will also contribute to growth,” the Policy Paper adds.
For the 2021/22 fiscal year, growth is projected at 2.5 per cent. All industries are expected to grow, consequent on higher external and domestic demand and stronger linkages between industries.
This will be supported by efficiency gains from investments in increased capacity and the completion of major infrastructure projects.
Agriculture, Forestry and Fishing; Mining and Quarrying; and Hotels and Restaurants are forecasted to, once again, figure prominently in the outturn.
Growth of eight per cent is projected for Agriculture, Forestry and Fishing, due to increased output for all crop types, following completion of the multi-million dollar Essex Valley irrigation project in 2021, among other inputs.
Mining and Quarrying is projected to grow by 6.3 per cent as continued increase in global demand for aluminium is expected to drive heightened capacity utilisation at all plants.
Meanwhile, Hotels and Restaurants is projected to record growth of five per cent as the sector is expected to benefit from product diversification, which is anticipated will lead to further increases in visitor arrivals.
The Fiscal Policy Paper indicates that growth for 2022/23 is projected at 2.8 per cent, with all Goods Producing and Services industries expected to grow.
“Widespread growth and expanded employment, alongside research and development and efficiency gains [are] expected,” the document states.