KINGSTON: Jamaica is projecting a one per cent economic growth this year, according to the Bank of Jamaica (BoJ).
BoJ Governor Brian Wynter said the rate of growth for the fiscal year is projected to be within the range of zero to one per cent.
Wynter said for the second quarter this year, growth was less than one per cent and attributed the improvement to, among other things, the response of Jamaican businesses to improvements in external demand for local outputs.
He said that while the outturn was “modest”, it represents “a return to growth…following six consecutive quarters of contraction”.
Wynter said that the pattern of growth for the October-December quarter and fiscal year is expected to be largely driven by activities in several areas, including agriculture, forestry and fishing; mining and quarrying as well as hotels and restaurants.
The BoJ Governor said the response of local businesses to improved external demand is assessed to have been the “primary driver” of expanded economic activity for the quarter.”
However, Wynter noted that local consumption declined for the quarter, “reflecting the impact of the ongoing fiscal consolidation and declining real incomes”.
Wynter said the October to December quarter is projected to record growth similar to the July to September period.
“In addition, we expect that the continued implementation of the policies set out under the (International Monetary Fund) Extended Fund Facility will provide a boost to investor confidence. But, domestic demand conditions are expected to remain relatively weak over the near-term, even as we return to growth,” he said.
Last week, the IMF said it had reached “preliminary understandings” with the Government of Jamaica on a set of economic policies and that economic activity in the country had expanded by nearly one per cent for the period of July to September 2013.
IMF mission chief for Jamaica, Jan Kees Martijn, speaking at the end of a one-week visit by an IMF delegation that conducted a second review of the Jamaica Extended Fund Facility (EFF) program, said overall policy implementation under the program is strong.
“All quantitative performance targets and indicative targets for end-September were met, including the floor on social spending,” he said. “All structural benchmarks to date have also been met in a timely manner, with the exception of the tabling of fiscal incentives legislation, which was subject to a minor delay.”
The IMF official said that the critical challenge for the Portia Simpson-Miller administration in the future would be to support economic growth, while continuing to undertake the necessary fiscal adjustment.
Meanwhile, president of the Jamaica Exporters Association (JEA), Andrew Collins, is urging exporters to continue searching for more opportunities in new and existing markets.
“We recognize that the best way to compete in an increasingly competitive international marketplace is by maintaining a competitive edge through innovation and diversification,” he said. “So, we continue to encourage product and market diversification, especially in South America, Africa and China,” Collins said during a breakfast forum, which was organized by the JEA.
He said JEA representatives recently met with a company interested in taking Jamaican products to China and invited exporters who are interested in the Chinese market to meet with the association.
Collins said there were also opportunities for increased exports under the PetroCaribe Fund agreement in Brazil and the Dominican Republic.
“We must also explore the opportunities for trade with the Dominican Republic and Brazil,” he said, adding that the Brazilian High Commissioner has been invited to address the sector’s annual general meeting in December to share some of the opportunities for trade with that country.