The Jamaican economy may not be growing at lightning pace but it should end 2019 with growth around 1.5 percent having grown an average of 1.2 percent for the year to September and reports from players in the private sector that volume sales in the December quarter bettered that of 2018.
Growth in the September quarter was pulled down to 0.6 percent as a result of a decline in the mining sector with the closure of the Alpart Alumina plant and weather-related impact that negatively affected growth in the agricultural sector.
As the end of 2019 approached, concerns about the state of the Global Economy surfaced with forecast for slower growth worldwide. According to BOJ, “a slowdown of 0.3 percentage point in the quarter ending September, relative to the growth in the June 2019 quarter” was seen. The main cause was the “weaker growth in China, Japan and selected emerging market economies”. The Canadian and US economies, however, outperformed growth projections for the penultimate quarter of 2019.
As 2020 starts, a number of the negatives globally seems to be receding with signs that trade issues between the USA and China are thawing as well as the cut in interest rates during 2019 in the USA is helping to keep US growth on track.
For Jamaica, there are three bright spots that augur well for 2020. The closure of the Alpart plant will be a drag on growth in the first half of 2020 but gains in other areas should overcome the negative impact of mining and lead to positive growth for the full year. On the flip side, a major game-changer is the switch over of Jamaica Public Service to new power generating plant that will cut import cost for fuel and result in a fall in electricity cost locally.
Data released by the Statistical Institute of Jamaica shows that inflation was 6.2 percent in 2019, the worse in four years, but the exchange movement played a major role in the spike. Statin also reported a continued decline in the unemployment rate at 7.2 percent to October and an increase in the number of persons employed.
Alpart closure a drag on 2019 GDP
February 10, 2020 by
