Caribbean & Central America - September 2022

Jamaica’s economic activity grew by 5.7% in the second quarter, led by tourism and the service sector, according to the Planning Institute of Jamaica (PIOJ), a government office.

On 18 August PIOJ director general Wayne Henry said that Jamaica’s GDP grew by 5.7% in the second quarter (April-June) with services gaining 7.7%, offsetting a weaker goods sector, which suffered 0.4% contraction.

Henry said the recovery was mainly shaped by the end of coronavirus (Covid-19) restrictions. The re-opening of tourism played a large part. The hotels and restaurant sector surged by 55.4% year on year. Tourist arrivals in April and May (data for June was not available) totalled 339,310, up by 110% on the comparable period last year. Increased activity at the country’s main airports boosted growth in transport, storage, and communications value added to 10%. There were also gains in wholesale and retail trade, repair and installation of machinery, electricity, and water supply, and in the finance and insurance sector.

By contrast, goods production was mixed. Mining & quarrying activity dropped 60.6%, largely because of a decline in alumina production. Construction contracted by 4.2% as government spending on civil engineering projects, including the Southern Coastal Highway project (SCHIP), dropped. However state-owned companies reported increased capital spending on power generation and distribution, and on port infrastructure. Second quarter growth in agriculture was 12.6%, but manufacturing disappointed, with growth of only 2.8% compared to the same quarter last year.

Henry said that the short-term outlook remains positive. GDP is calculated to have grown by 6.1% in January-June this year, which because of base effects will ease down to 2%-3% in the third quarter (July - September). For the 2022-23 fiscal year (the 12 months to end-March 2023) the authorities are now predicting 3%-5% growth. Henry commented “It should be noted, however that the economy is not expected to attain pre-Covid GDP levels until fiscal year 2023/24”.

Tourism minister Edmund Bartlett welcomed the PIOJ report saying that it underlined “the fact that the tourism industry is driving Jamaica’s post Covid-19 economic recovery”. He highlighted “the resilience of the sector, which is rebounding steadily”.

Separately, the Jamaica Tourist Board reported the average length of stay by tourists has returned to the 2019 level of 7.9 nights. Average spend per visiting tourist has increased from US$168 per night in 2019 to US$182 per person, per night. In the year to date (January-July) 1.714m tourists had visited the island, up by 139.4% on the previous year. Bartlett said: “We remain optimistic that our performance figures will return to 2019 pre-Covid record levels by 2023.”