Jamaica’s economy is bracing for its steepest quarterly decline in years as the aftermath of Hurricane Melissa hits key sectors, though officials project a return to growth in the final quarter of 2026.
The Planning Institute of Jamaica (PIOJ) on Tuesday (November 25) forecast a contraction of 11 to 13 per cent for the October to December 2025 quarter, with the full fiscal year 2025/2026 expected to record a 3 to 6 per cent decline in overall economic activity.
Speaking during the PIOJ’s hybrid quarterly press briefing, Director General Dr. Wayne Henry said the island’s economy had been on track for steady growth prior to the Category 5 hurricane. “Growth of 3.1 per cent was estimated for the first half of the current fiscal year and this was expected to continue throughout the second half,” he noted.
However, Hurricane Melissa’s passage has altered that trajectory, placing substantial downward pressure on nearly every sector of the economy. The storm caused extensive damage to housing, electricity networks, roads, water supply infrastructure, and productive assets.
Agriculture emerged as one of the hardest-hit sectors. Dr. Henry highlighted that the seven most affected parishes account for 74 per cent of land used for domestic crop production and a significant share of animal and export crop farming. Losses include farmlands, livestock, fishing equipment, and access roads.
The accommodation and food services industry is also facing major disruptions. Nearly 89 per cent of the island’s hotel room stock is concentrated in the parishes most affected by the hurricane, leading to temporary closures and restricted operations. This is compounded by the November 2025 U.S. travel advisory, which warns American visitors to reconsider travel to Jamaica, further reducing arrivals.
Critical infrastructure challenges extend to electricity, water, waste management, and transportation. “Full recovery of electricity generation and distribution, particularly in western parishes, is likely to be significantly delayed due to limited accessibility to some communities,” Dr. Henry said. Restoration of water supply is also dependent on electricity to power pumping stations.
The construction sector has experienced work stoppages on major projects, while damage to information and communication technology, roads, airports, and shipping ports is expected to reduce services and sales across multiple industries.
Dr. Henry warned that the October to December 2025 quarter could record Jamaica’s worst quarterly economic performance since the COVID-19 pandemic’s April to June 2020 downturn. Still, he offered cautious optimism for recovery. “The economy is expected to return to growth in the October to December 2026 quarter,” he said, signaling a potential rebound once repair and reconstruction efforts gain momentum.
