BOJ estimates GDP decline in Q1

The country’s central bank is estimating that Jamaica’s economy contracted in the first quarter of this year making 5 straight quarters of decline.

The governor of the central bank Brian Wynter in addressing the Bank of Jamaica’s quarterly briefing indicated that the estimated decline in the economy to be within the range of -1.2 per cent and -0.2 per cent. The estimated decline is reflected in both the tradable and non-tradable sectors. The outturn for the quarter was influenced by severe drought conditions as well as weak domestic and external demand, the governor stated. Domestic demand continued to be adversely affected by declining incomes and was exacerbated by uncertainty surrounding negotiations with the IMF. In addition, high unemployment and lower remittance inflows continued to constrain domestic demand.

For the review quarter, Agriculture, Forestry & Fishing is estimated to have contracted, in contrast to growth of 6.5 per cent in the March 2012 quarter. Preliminary data indicated that domestic and export crop production contracted by 10.0 per cent and 2.0 per cent, relative to the respective expansions of 7.8 per cent and 7.4 per cent in the March 2012 quarter. The estimated decline in export agriculture reflected contractions of 1.9 per cent, 18.0 per cent and 90.2 per cent in sugar cane milled, citrus and cocoa, respectively.

Mining & Quarrying is estimated to have contracted for the fifth consecutive quarter, albeit at a slower pace in the review quarter. The decline is inferred from lower capacity utilization in the alumina industry stemming from power generation and machinery problems at one plant. Higher utilization was, however, recorded in the crude bauxite industry arising from normalization over depressed levels in the corresponding period of last year. Capacity utilization fell to 39.2 per cent in the alumina industry relative to 41.7 per cent in the March 2012 quarter while utilization in the crude bauxite industry increased to 92.9 per cent relative to 88.4 per cent in the corresponding quarter of 2012

Hotels & Restaurants is estimated to have declined in the March 2013 quarter, reflecting primarily a contraction in Hotels. The performance of Hotels reflected a decline of 3.2 per cent in total stopover visitor arrivals. Visitor expenditure declined by 3.8 per cent relative to growth of 2.7 per cent in the corresponding period in 2012.

Electricity & Water Supply is accessed to have also contracted in the March 2013 quarter following growth of 0.2 per cent in the corresponding quarter of 2012. The performance of the industry reflected the impact of decreases of 1.2 per cent and 1.1 per cent in electricity generation and water production, respectively. The fall in electricity generation was influenced mainly by lower residential consumption of 5.0 per cent attributed to conservation as well as a marginal contraction of 1.9 per cent in industrial electricity sales.