May 2017 Financial News

EGC projects 2.3% growth for 2017/18 (Jamaica)

May 01, 2017

Jamaica's Economic Growth Council (EGC) has projected an economic growth rate of 2.3 percent for financial year 2017/18.

In its quarterly “Report to the Nation” for the period January-March, 2017, the EGC said that the 2.3 per cent growth is predicated primarily on improvements in all industries, with the exception of producers of government services.

It said that growth is anticipated to be supported by:

* The expected reopening of the Alpart Alumina Refinery, following its sale to Chinese producer Jiquan Iron & Steel Company (JISCo);
* A strengthening of domestic confidence levels;
* Growth in the economies of Jamaica's trading partners; and
* Improved efforts at implementing Government of Jamaica- supported growth-inducing projects, notably timely disbursements and implementation.

The EGC noted that growth projected for the Jamaican economy is against the background of benefits to be gained from the implementation of the government's macro-economic programme, which is supported by a three-year IMF-approved Stand-By Agreement (SBA), which is focused on macroeconomic stability and job creation.

The EGC said in its report that Jamaica's macro-economic conditions have continued to improve, evidenced by:

A reduction in the current account deficit; low and stable inflation and inflation expectations; lowering of public debt to GDP ratio;
The highest business and consumer confidence levels in 15 years;
Increased external demand for some Jamaican exports (tourism); and
Increased employment levels.

The latest STATIN data indicate real GDP growth of 1.1 per cent for October-December 2016 relative to the similar quarter of 2015.

The EGC says that this represented eight consecutive quarters of economic growth.

For this quarter real value added of the goods producing industry was estimated to have increased by 3.1 per cent, due to estimated growth in two of the four industries.

The industries for which value added increased were – Agriculture, Forestry and Fishing (17.1 per cent). The Mining and Quarrying and Manufacturing industries were estimated to have contracted by 11.9 per cent and 0.2 per cent, respectively.

The Services industry grew 0.6 per cent, as all industries with the exception of Producers of Government Services, recorded increases.

Among the industries estimated to have realised an increase in value added were: Electricity and Water Supply, up two per cent; Finance and Insurance Services, up one per cent and Hotels and Restaurants, up 2.5 per cent.

For the January-March quarter of 2016, which was the last quarter of 2016/17, real GDP was expected to grow within the range of 0.8 per cent to 1.8 per cent. This out-turn was predicated on:
Continued strengthening of productive activities in both the Goods Producing and Services industries;
Within the goods producing industry, the performance of the construction industry is expected to be bolstered by efforts to accelerate the implementation of major road infrastructure projects under the Major Infrastructure Development Programme (MIDP) and manufacturing will continue to be driven by continued increases in food processing.

The performance of the Agriculture, Forestry and Fishing industry, however, was tempered by drought conditions experienced during January-March, 2017.

For the Services industry, it is anticipated that Hotels and Restaurants will be the main driver of growth, as it continues to benefit from increased visitor arrivals.

For financial year 2016/17, real GDP growth of 1.6 per cent was projected, underpinned by real value added increases in the Goods Producing and Services industries.

The industries expected to be the most significant contributors to growth for 2016/17 are- Agriculture, Forestry and Fishing; Electricity & Water Supply; and Hotels and Restaurants.

 

Source:
BY BALFORD HENRY
balfordh@jamaicaobserver.com
Senior staff reporter
Jamaica Observer
Sunday April 30, 2017

http://www.jamaicaobserver.com/sunday-finance/egc-projects-2-3-growth-for-2017-18_97273?profile=1056