Jamaica’s GDP Growth Is Expected To Rebound To 4.4% In 2021

• In its recent country report, Fitch Solutions estimated that Jamaica’s real GDP growth will rebound to 4.4% growth in 2021, from an estimated 9.9% contraction in 2020, driven by increased tourist arrivals. Recovery will be concentrated in H221, as the continued spread of COVID-19 restrained tourism activity in H121, undermining both exports and private consumption growth. 
• Jamaica’s current account deficit is anticipated to flip to a surplus of 1.0% of GDP in 2021, from a deficit of 0.1% in 2020, on the back of strong remittance inflows and services exports. 
• The Bank of Jamaica will keep its monetary policy rate at 0.50% through to the end of 2021 in order to boost lending amid the economic fallout from the pandemic. The Jamaican dollar is also expected to continue to depreciate in the short term as the domestic tourism industry continues to operate below pre-pandemic levels, limiting the supply of US dollars in Jamaica as inflation climbs. 
• However, there are downside risks in Jamaica's slow vaccination programme and rising crime. Jamaica's violent crime rate was the highest in Latin America and the Caribbean in 2020. A lack of economic opportunities could push the crime rate higher in H221 and 2022, weakening foreign investment inflows. Any delays to the recovery of the tourism industry would severely curtail Jamaica's economic growth outlook.

Source: (Fitch Solutions)