January 03, 2025
Jamaica’s economy contracted more than initially estimated during the July to September quarter of 2024, according to new data released on Tuesday. The Statistical Institute of Jamaica (Statin) reported a 3.5 percent decline in the third-quarter gross domestic product (GDP), a sharper drop than the previously reported 2.8 percent.
This marks the first negative GDP growth for Jamaica since the economy shrank by 6.6 percent in the January to March quarter of 2021, which capped a recession triggered by the COVID-19 pandemic and included five consecutive quarters of contraction.
Since then, the economy had rebounded, expanding for 13 straight quarters. However, the growth rate had been declining for the last five quarters before this recent downturn. Adjusted for inflation, the output in the third quarter of 2024 was lower than in the same quarter of 2019, before the pandemic-induced fallout.
Statin attributed the economic decline to the passage of Hurricane Beryl in July 2024, which severely impacted the Agriculture, Forestry & Fishing, and Mining & Quarrying industries. Heavy rains and winds damaged mature crops, hindered harvesting, delayed planting, and caused significant damage to a major alumina-producing plant. Additionally, significant damage to the Jamaica Public Service Company (JPS) infrastructure led to delays in power restoration across several parishes, reducing electricity and water consumption and adversely affecting the performance of the Electricity and Water Supply and Other Services industries. Tourism also declined by 6.1 percent in the quarter.
The GDP report provides a retrospective overview of economic activity for the July to September period. Despite being a backward-looking metric, it remains a crucial indicator of the Jamaican economy’s health, especially amid rising recession concerns. The expectation is that the contraction continued into the October to December quarter and may extend into the January to March 2025 quarter.
Source: (Jamaica Observer)
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