KINGSTON, Jamaica: Fuelled by strong performances in mining and quarrying, hotels and restaurants, agriculture, forestry and fishing, the Jamaican economy recorded growth of 1.5 per cent during the April to June quarter, the second consecutive period of growth of more than one per cent.
The assessment was delivered by the Planning Institute of Jamaica (PIOJ) which also noted that the growth in real Gross Domestic Product (GDP) reflected the positive out-turn of the goods producing industry, which posted an increase of 5.3 per cent, and the services sector, which increased by 0.2 per cent.
“This represented the first quarterly growth for the services industry since October-December 2007,” said PIOJ Director General Dr. Gladstone Hutchinson at the quarterly review of the country’s economic performance.
Dr. Hutchinson attributed the overall improvement recorded in the economy during the quarter to the positive performance in all industries, except electricity and water supply. Hutchinson said other contributing factors to the economic growth were increased production and replanting activities in agriculture, following the impact of Tropical Storm Nicole, and more favourable weather conditions relative to the corresponding quarter of 2010.
He also credited the economic up-turn to the implementation of some elements of the Growth Inducement Strategy, particularly through the Jamaica Development Infrastructure Program (JDIP), which recorded total expenditure of $4.2 billion for April to June 2011, the start of the Community Renewal Program and legislative reforms, including the reduction of stamp duties and estate taxes.
“The country has begun to realize benefits from green-shoots arising from fundamental reform of systems, procedures and processes aimed at mitigating and building economic and infrastructural resilience against shocks, vulnerabilities and other global developments,” said Dr. Hutchinson.
Within the goods producing industry, all categories recorded increases, with mining and quarrying registering the largest growth, up by 30.8 per cent. Agriculture, manufacturing and construction grew by 9 per cent.
Nearly all sub-categories of the services industry recorded growth, with hotels and restaurants registering the largest increase of 2.5 per cent, followed by finance and insurance with 0.5 per cent and the wholesale and retail trade, which grew by 0.5 per cent.
Other macro-economic highlights of the economic performance included the continued moderation of the rate of inflation. For the review period, the rate of inflation was 2 per cent. The main contributors to the upward price movements were housing, water, electricity, petrol and other fuels, food and non-alcohol beverages.
Although pleased with the economic out-turn for the quarter, Hutchinson was cautiously optimistic that the growth trajectory of the past two quarters will continue throughout the remainder of the year, “albeit at a slower rate than previously projected”, because of the expected adverse implications from the downgrade in the United States economy and the intensification of the debt crisis in some European countries.
Hutchinson said the fiscal adjustments embodied in the forthcoming supplementary budget are also expected to negatively impact the economy.