Jamaica GDP By Expenditure Outlook

• Household spending in Jamaica will remain by far the largest component of economic activity in 2021 (89.8% of GDP in 2019). While Fitch forecasts that annual growth will average 2.3% from 2021 to 2030, relatively weak investment will ensure that household spending will make up a greater part of the economy. 
• Fixed investment currently accounts for approximately 24.6% of GDP, supported by large investments in Jamaica's tourism industry. Tourism and the services sector will remain key drivers of economic growth, with agriculture and manufacturing playing an increasingly important role. 
• Consumption will be supported by structurally lower inflation rates (compared with historical averages) and rising employment. Additionally, programmes aimed at reducing taxes for lower-income households will bolster disposable incomes.
• Fitch expects government consumption as a percentage of GDP to decline moderately over the next decade. The Jamaican government will continue to exercise fiscal restraint, adhering to International Monetary Fund-prescribed policies aimed at reducing the national debt. Government consumption as a percentage of GDP already fell from 16.3% in 2012 to 13.6% in 2019, with further plans to reduce government outlays. 
• Gross fixed capital formation accounted for 24.1% of GDP in 2019. In the medium term, Fitch expects to see a moderate rise in investment as a share of economic output as tax reductions help spur investment, particularly in the tourism sector. 
• That being said, over the long term, structural weaknesses, such as corruption, crime, poor infrastructure and an unskilled labour force, will weigh on investment and reduce its share of the overall economy.

(Source: Fitch Solutions)