July 1, 2026
Jamaica’s economy shrank for a second consecutive quarter at the start of 2026, as the country continued to dig out from Hurricane Melissa, the costliest storm in its history. According to the Statistical Institute of Jamaica (STATIN), total value added at constant (2015) prices fell 4.1 per cent to $415.9 billion in the January–March quarter compared with the same period in 2025.
The contraction was broad-based: goods-producing industries fell 7.3 per cent and services industries declined 3.0 per cent. It follows an even steeper 7.1 per cent year-on-year drop in the final quarter of 2025, when Melissa made landfall, meaning the economy has now contracted for two straight quarters. Still, the first-quarter result came in better than the Planning Institute of Jamaica had projected in its preliminary estimate of a 5.9 per cent decline, suggesting the recovery is proceeding somewhat faster than initially feared.
Melissa’s fingerprints are everywhere
Hurricane Melissa struck Jamaica in October 2025 and, according to World Bank and Inter-American Development Bank estimates, caused roughly US$8.8 billion in physical damage — equivalent to about 41 per cent of the country’s 2024 GDP and more than four times the damage inflicted by Hurricane Gilbert, the island’s previous costliest storm. Around 150,000 structures were damaged, some 40–50 per cent of hotels were affected, and western parishes went without electricity for weeks. The government has since secured up to US$6.7 billion in multilateral financing for recovery and reconstruction.
Six months later, the storm’s effects are still working through the national accounts. STATIN’s data show the clearest damage in three areas:
Agriculture – Value added fell 18.3 per cent, driven by a collapse in fruit production — banana output was down 86.0 per cent and plantains 83.7 per cent — alongside declines in root crops (-25.5%), other crops such as corn, sugar cane and coffee (-32.8%), and animal production (-12.4%), as reduced broiler, dairy and egg output took a toll. A rare bright spot was vegetables and condiments, up 2.4 per cent, which cushioned the overall decline.
Tourism-linked activity – Accommodation & Food Service Activities contracted 16.6 per cent as hotel closures from storm damage combined with a 28.7 per cent plunge in foreign national arrivals (to 493,190, from 692,122 a year earlier). The knock-on effects rippled through Transport & Storage (-5.5%, on a 27.5 per cent drop in stopover arrivals and a 24.3 per cent fall in airport passenger traffic) and Education, Health & Other Services (-3.0%), where amusement parks and recreation activities were hit hardest.
Mining – Bauxite and alumina output tumbled, pulling Mining & Quarrying down 23.5 per cent. Alumina production fell 30.3 per cent to 267,060 tonnes and crude bauxite fell 26.4 per cent to 415,143 tonnes, with exports of both declining as well.
Electricity and water consumption also fell sharply (-10.2% for the combined industry), reflecting reduced demand as storm-damaged infrastructure and businesses came back online only gradually.
Where the economy held up
Not every sector retreated. Manufacturing eked out a 0.6 per cent gain, helped by a jump in cement production as hurricane-recovery construction lifted domestic demand for building materials, plus higher paint output. Financial & Insurance Activities was the only services industry to grow, up 2.9 per cent, on stronger commercial banking income from net interest, fees and commissions.
Construction itself declined 1.4 per cent despite the rebuilding effort, as a fall in imported construction materials and reduced capital spending on the South Coast Highway Improvement Project outweighed higher local building-materials sales.
A quarter-on-quarter bounce
Looking at the more immediate trajectory, seasonally adjusted quarter-on-quarter data tell a more encouraging story: real value added rose 3.3 per cent from the fourth quarter of 2025, with goods-producing industries up 5.8 per cent and services up 2.5 per cent. Mining & Quarrying jumped 17.2 per cent, Manufacturing 12.5 per cent and Accommodation & Food Service Activities 18.8 per cent quarter-on-quarter — early signs that the worst of the post-hurricane shock may be behind the most affected sectors, even though year-on-year comparisons remain deeply negative.
Source: Statistical Institute of Jamaica (STATIN) | www.statinja.gov.jm
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