Jamaica’s economy contracted by an estimated 5.9 percent during the January to March 2026 quarter as the country continued to grapple with the fallout from Hurricane Melissa and weaker global demand, according to the Planning Institute of Jamaica.
Speaking at a media briefing on Wednesday, PIOJ Director General Wayne Henry said the downturn reflected the lingering effects of the hurricane, which struck the island in October last year and disrupted activity across nearly every sector of the economy.
“The hurricane’s impact was compounded by weakened external demand, largely reflecting the intensification of geopolitical tensions in the Middle East,” Henry said. “The resulting disruptions to supply chains and surging energy prices curtailed trade flows and dampened external demand.”
The mining sector recorded the steepest decline, falling 26.6 percent during the quarter. Agriculture contracted by 20.3 percent, while manufacturing declined by 7.7 percent and construction fell by 1.3 percent.
Jamaica’s tourism industry also recorded a major downturn. The accommodations and food services sector contracted by 20.4 percent, reflecting a 17 percent drop in visitor arrivals and a 27.5 percent reduction in stopover arrivals.
Total visitor spending for the period declined 21.3 percent to US$976.4 million.
Henry said preliminary data also showed airport arrivals for April 2026 were down 22.5 percent compared with April 2025, partly due to the continued impact of Hurricane Melissa.
For the 2025-26 fiscal year, the economy is now estimated to have contracted by 1.7 percent, reversing earlier projections for 1.9 percent growth.
Henry said the hurricane resulted in a loss of approximately 3.6 percentage points in real value-added output for the fiscal year.
Despite the broader economic slowdown, Jamaica’s labor market remained relatively stable. Data from the Statistical Institute of Jamaica showed the unemployment rate stood at 3.6 percent in January 2026, down slightly from the previous year.
However, the number of employed persons fell by 30,100 to 1,389,400 compared with January 2025.
Looking ahead, Henry warned that economic prospects for the April to June 2026 quarter remain negative, with the economy projected to contract between three and four percent as industries continue recovering from hurricane damage.
He also cautioned that ongoing conflict in the Middle East could continue driving up oil, fertilizer and shipping costs, placing further pressure on inflation, trade and economic output.
“Given the central role of oil in production, price volatility has significant implications for inflation, the trade balance, and real GDP,” Henry said.
The PIOJ projects that the economy could return to growth during fiscal year 2026-27, forecasting expansion between one and three percent as recovery efforts strengthen later in the year.
Still, Henry warned that risks remain, including potential weather-related shocks during the upcoming hurricane season, lower-than-expected demand from major trading partners such as the United States, and operational disruptions in key industries including mining and manufacturing.
