Jamaica’s Q1 GDP Contracts by 5.7%

• Influenced primarily by an 8.1% contraction in the Services Industry, Jamaica’s GDP declined by 5.7% in the first quarter of 2021 when compared to Q1 2020. 
• The pandemic and the measures implemented to stem the spread continue to weigh on service delivery and as such all sectors within the Services Industry reported a falloff in output, with the exception of the Producers of Government Services which was effectively flat at 0.1%. The largest reduction was seen in the hotels and restaurants industry (-56.2%) due to the 71.9% reduction in stop-over arrivals and the sustained suspension of cruise activities. 
• The Goods Producing Industry on the other hand grew by 3.0% mainly due to increased output levels in Construction (+12.6%) reflecting growth in both the Other Construction and Building Construction components. Growth in Mining & Quarrying (+6.2%) was also a major contributor to the expansion in the goods-producing industry outturn due to increased production of both alumina and crude bauxite. However, the Agriculture, Forestry & Fishing and Manufacturing industries declined by 2.0% and 1.4%, respectively owing to the impact of adverse weather conditions and decreases in both the Food, Beverages & Tobacco and the Other Manufacturing sub-industries. 
• Despite the current negative YoY quarterly performance, real GDP is projected to increase within the range of 7.0% to 9.0% YoY during the April–June 2021 quarter (PIOJ). The forecast is driven by the commencement of the recovery process relative to the low output levels recorded in the corresponding period of 2020, the relaxation of some COVID-19 containment measures compared to a year ago and increased domestic demand due to continued expansion in employment level. Furthermore, the continued roll-out of vaccination programmes globally augurs well for the world economy and a strengthening of external demand for Jamaica’s goods and services.

Source: (PIOJ)