Mar 2016 Financial News

Economy grows at below one per cent for 2015 (Jamaica)

Mar 04, 2016

Planning Institute of Jamaica (PIOJ) yesterday reported that the country has experienced sluggish growth of 0.8 per cent for the calendar year 2015.

Director of the entity, Colin Bullock, during a media briefing for the review of the October to December period 2015, stated that despite the slow growth recorded for the calendar year, it reflects a strengthening of performance during the second half of the year when there was an estimated growth of one per cent, up from 0.5 per cent over the first six months.

According to Bullock the industries which recorded the largest growth during the year were manufacturing, up 2.4 per cent; hotels and restaurants which increased 2.0 per cent, electricity and water, up 1.5 per cent, and transport, storage and communication which grew 1.1 per cent. The goods-producing industry also grew by 1.1 per cent, while the services industry was estimated to have grown by 0.6 per cent.

“Real GDP is estimated to have grown by 0.8 per cent — this compared with the 0.5 per cent growth recorded in 2014,” the director stated. “In conclusion, we noted that the economy has grown continually slowly but with encouraging recovery in both the goods producing and services industry and with increasing employment.”

Over the October to December 2015 quarter, the economy grew by an estimated 0.6 per cent relative to the corresponding quarter of 2014, led by the goods producing and services industries. Within the goods-producing industry, increases in real value added for manufacture (3.7 per cent) and construction (0.7 per cent) outweighed respective declines of -3.3 per cent and -2.3 per cent for the agriculture, forestry and fishing and mining and quarrying industries, respectivley.

Industries registering the largest growth rates for the services industry were electricity and water supply up 5.0 per cent and hotels and restaurants 1.2 per cent respectively. Real value added for hotels and restaurants increased by 1.2 per cent, reflecting growth of 1.0 per cent in stopover arrivals, with the Caribbean experiencing growth of 17.6 per cent.

The finance and insurance sectors also increased by 0.5 per cent, led by an increase in net interest income on the stock of loans at deposit-taking institutions as well as higher fees and commission income. According to the PIOJ, the share of non-performing loans to total loans continued to trend downwards, reaching 4.2 per cent at the end of September 2015 compared with 4.8 per cent at the end of September 2014.

Bullock noted that the short-term outlook remains positive and is based on the continued strengthening of activities in the goods-producing and services industries. Growth is expected in mining and quarrying and the agriculture, forestry and fishing industries, while continued strengthening is expected for other industries.

“Preliminary data for January 2016 reflects increased alumina production of 3.6 per cent and increased crude bauxite production of 19.4 per cent. We note also continued price stability associated with increased food production and lower energy costs, continued consumer and investor confidence level. A deflation of -0.4 per cent was also recorded for January.”

Real GDP is expected to grow between 0.5 per cent and 1.5 per cent for the first quarter, while growth for the fiscal year 2015 to 2016 is also projected to be within the same range.

Source:
BY KARENA BENNETT
bennettk@jamaicaobserver.com
Business reporter
Jamaica Observer 
Friday March 4, 2016     

http://www.jamaicaobserver.com/business/Economy-grows-at-below-one-per-cent-for-2015_53550