Econ growth to continue for Jamaica

The Jamaican economy shows several signs of growth for 2018 with many positives prominently exposed even as the Statistical Institute of Jamaica data shows growth on nearly 1 percent per annum in the September quarter.
Subsequently to the quarter, Alpart Alumina plant came into production and will add value to growth in the December quarter. Pace of tourism arrivals picked sharply in the post April period climbing in double digit in stop over arrivals and bode well for continued high levels of increase in 2018. Employment was running at a rate of 2.46 percent in July 2017 over the previous 12 months period, suggesting that the economy was probably growing closer to 2.5 percent level than the low pace the authorities suggest growth was at. Other data is suggesting much higher growth levels as well. Corporate tax collection is running 33 percent ahead of forecast and 42 percent ahead of collections to November 2016 over the prior year a strong indication that revenues and profits were increasing at a fast pace. GCT collection on local goods and services is up 8 percent about budget and a strong 15 percent ahead of the 2016 period and construction levy is 61 percent above budget and 66 percent over collections for the same period in 2016, a very good proxy of developments within the construction sector, while education taxes a proxy for increased wages and employment, end up 5.9 percent above target and 15 percent over actual collection in the period to November 2016.

New building going up in New Kingston

Sales for Caribbean Cement grew 15 percent to September last year and more growth is expected in 2018 with a surge in construction. The construction sector should get a boost from the start of the Harbour View to Portland road works and widening of the Hagley Park and Constant Spring roads in Kingston. Bank loans also grew in 2017 and should continue to grow in 2018 as interest rates fall and demand for loans to fund economic expansion climbs. The BPO and poultry sectors are expanding with more to come.
Treasury bill rates fell 29 percent from 6.56 percent to 4.83 percent, that level of decline, while this level of decline seems unlikely to happen in 2018, technical indicators are pointing to lower interest rates. IC is forecasting rates on 182 days Treasury bill hitting 4 percent by the end of the 2018 first quarter.
There is increasing employment taking place and that should continue in 2018 as economic activity gains momentum, this will mean more spending and increased tax collection for government. Alpart’s resumption of Alumina production is a big positive for the overall economy, for increased government revenues and increased demand for local goods and services.

The mining sector to add to growth in 2018.

Importantly, there are several indicators that productivity has jumped sharply with major growth in production in many areas of production particularly in tourism and manufacturing thus offsetting by a wide margin the drag of inflation differential and revaluation of the local dollar. A strong 21 percent growth in non-traditional exports to October and expansion of a number of manufacturing companies is a good indicator of increased productivity as constraints on local consumption eases thus boosting demand. Revenue from total exports was valued at US$1.08 billion, 9.4 percent above the same period 2016 to October but will get a big boost this year with the reopening of Alpart alumina operations.
IC expects the debt to GDP to fall towards 100 percent of GDP by the end of 2019 fiscal year as the government continues to operate with a fiscal surplus. Inflation should remain subdued, house prices will rise. IC expect little or no new taxes in the 2019 fiscal year as revenues continue to be buoyant and Alpart operations to provide fresh new revenues.

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