The Planning Institute of Jamaica (PIOJ) expects the Jamaican economy to grow in the March quarter but contract overall for the fiscal year. This outlook follows a second consecutive quarter of decline, with a reported 1.8% decrease in the October-December 2024 period. However, these figures are preliminary, with the final assessment of the economy’s performance resting with the Statistical Institute of Jamaica (Statin), which will release GDP data for the December quarter at the end of March.
PIOJ Director General Dr. Wayne Henry attributed the contraction to the impacts of Hurricane Beryl, rather than a fundamental weakness in the economy. He emphasized that, in the absence of the hurricane, the economy would have likely continued its strong performance. “The downturn in economic output does not indicate a recession,” Henry stated during a quarterly briefing on Wednesday. “The decline largely reflected the lingering effects of Hurricane Beryl, as well as storm Raphael and other hydrological events during the review quarter.”
These environmental shocks negatively affected key sectors such as electricity, water supplies, agriculture, wholesale and retail trade, and manufacturing. During the December quarter, goods-producing industries saw a 4.7% decline, while services industries dropped by 0.7%.
The PIOJ also reported a 0.9% contraction in the economy for the calendar year January-December 2024. While two consecutive quarters of decline typically signal a recession, Henry pointed out that economists also consider other factors like employment rates, income, and production levels.
Looking ahead, the PIOJ forecasts a return to positive growth for the January-March 2025 period, estimating growth between 0.1% and 1.0%. For the fiscal year ending March 2025, however, the agency projects a real GDP contraction between 0.5% and 1.5%.
Additionally, the PIOJ is closely monitoring global uncertainties, particularly regarding potential tariff hikes announced by U.S. President Donald Trump. Henry noted that it’s still too early to determine the exact impact, as the details and scope of these changes are still unfolding. These tariff hikes could affect Jamaica, especially in areas like trade, foreign aid, immigration, and remittances.
Despite these challenges, Henry reiterated his optimism about the economy’s recovery: “The economy will return to positive output performance, that is, growth, in the January to March 2025 quarter.”
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