Bank of Jamaica (BOJ) Governor, Richard Byles, says the country’s growth outturn for fiscal year 2021/22 is likely to be higher than previously anticipated.
This, he said, considering the stronger than expected improvements in the economies of Jamaica’s main trading partners from the fallout sparked by the coronavirus (COVID-19) pandemic.
“The Bank is currently projecting that real [gross domestic product] GDP growth for this fiscal year will be in the range of 7-10 per cent, up from the 5-8 per cent we had indicated in May 2021. Leading indicators, such as [general consumption tax] GCT flows and electricity consumption, point to this rebound,” the Governor stated.
He was speaking during the BOJ’s digital quarterly media briefing on Friday (August 20).
Mr. Byles said the key drivers of this rebound are the tourism and related sectors, largely driven by successful vaccination programmes in key source markets, “and the assumption of careful control of community spread in Jamaica”.
Additionally, Mr. Byles said the Bank anticipates continued strong growth in the construction sector, while noting that risks to the growth forecast were “balanced”.
“A faster pace of growth is possible if tourist arrivals and related activities rebound faster, due to the pent-up demand that exists,” he noted.
Mr. Byles said the main downside risks relate to the domestic spread of the COVID-19 virus, the emergence of new variants, and the accompanying measures to control it.
“If Jamaica’s stringency measures are tightened and protracted, this could influence a slowdown in travel and disruptions in the production and distribution of goods,” the Governor added.
He maintained, however, that the macroeconomic outlook pointed to “even stronger improvement” in real economic activity.
Meanwhile, Mr. Byles said the 6.7 per cent contraction in domestic economic activity for the March 2021 quarter, as published by the Statistical Institute of Jamaica (STATIN), compared with 8.3 per cent for the December 2020 quarter, “represents another in a series of improvements”, also incorporating labour market outturns.
He pointed out that STATIN’s latest data indicated that the unemployment rate of 9.0 per cent at April 2021, was 3.6 percentage points lower than the figure for July 2020, “when the economy was experiencing the early stages of the pandemic”.
“The decline in the unemployment rate reflected a reduction of 42,300 in the number of unemployed persons as well as a growth of 42,100 in the labour force,” Mr. Byles said.