Jamaica's economy contracts 2.3% for the First quarter of 2020

Market News

July 1, 2020

Jamaica’s economy contracts 2.3% for the First quarter of 2020

July 01, 2020

In the first quarter of 2020, the Jamaican economy decreased by 2.3% when compared to the similar quarter of 2019, according to Statistical Institute of Jamaica (STATIN). This was attributable to declines in both the Services and Goods Producing industries of 2.5% and 1.9%, respectively. Notably, the economy’s output was adversely affected by the outbreak of the novel coronavirus, COVID-19, and the Government’s steps to curtail its spread.

The Goods Producing Industries’ experienced declines in Mining & Quarrying (35.8 %), and Construction (3.3 %). However, Agriculture, Forestry & Fishing rose by 7.8% and Manufacturing by 2.2%. Moreover, STATIN noted that, “the decline in the Mining & Quarrying industry was due to lower production of alumina and bauxite resulting from the closure of the JISCO Alpart refinery.” In addition, the decrease in output for the Construction industry was due to a reduction in activities in all sub-group. On the other hand, STATIN highlighted that, “the Manufacturing industry’s performance was largely attributed to an increase in both sub-industries: Food, Beverages & Tobacco (0.1%) and Other Manufacturing (5.3%).”

The Services industries experienced a decline due to reduced activities in Wholesale & Retail Trade; Repairs; Installation of Machinery & Equipment (1.3%), Hotels & Restaurants (14.1 %), Transport, Storage & Communication (2.5 %), Finance & Insurance Services (1.2 %) and Other Services. Nevertheless, Electricity & Water; Real Estate, Renting & Business Activities and the Producers of Government Services advanced by 2.1%, 0.2% and 0.2%, respectively.

Moreover, the performance of the Hotels & Restaurants industry was as a result of a decline in the groups: hotels & other short-stay accommodation and restaurants, bars and canteens. The group hotels & other short-stay accommodations was affected by a 19.1% decline in foreign national arrivals primarily due to travel restrictions levied by the Government in March 2020 to limit the transmission of COVID-19.

In comparison to the fourth quarter of 2019, the economy contracted by 1.7%. This was due to a 2.5% decline in the Services industries versus a 0.7% increase in the Goods Producing Industries.

Notably, “the economy declined by 0.1% in the fiscal year 2019/2020 compared to the fiscal year 2018/2019,” according to STATIN.

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