The Jamaican Economy Grows 6.3% in Q3 2021

  • The Jamaican economy grew by 6.3% in the September quarter as output in both the goods producing and services industries expanded by 2.8% and 7.3% respectively, according to the Planning Institute of Jamaica. 
  • The expansion in the goods producing industry was mainly driven by an increase in the real value added for the manufacturing (8.5%), the agriculture, forestry & fishing (7.2%), and the construction (1.7%) sectors.   
  • The growth in agriculture reflects the impact of increased demand, particularly from the Tourism sector, and the implementation of measures by the GOJ to improve output in the industry. Higher output from both the Other Manufacturing and the Food, Beverages & Tobacco components, drove growth in the Manufacturing sector. Increased capital expenditure on civil engineering activities, hotel construction and commercial office space influenced growth in the construction sector. Of note, growth in the construction industry has cooled significantly from its brisk pace of 17.4% in Q2 and 10.5% in Q1. 
  • All sectors within the services industry expanded, with the hotels and restaurants sector (114.7%) seeing the most significant growth. This reflected an increase in tourism activity relative to Q3 2020 as high vaccination rates in source markets and increased demand for travel allowed several hotels and restaurants to reopen. Notably, for July-August 2021 total stopover arrivals rose by 293.3%, and cruise passenger arrivals totalled 8,379 relative to none in the corresponding quarter of 2020. 
  • Prospects for the overall economy in the short-term are positive due to the recent easing of previously implemented containment measures, and the improved outlook for the tourism sector. The resumption of cruise travel and pent up demand for travel as the peak winter tourism season begins augurs well for the sector. The expected growth in tourism should also have spillover effects to other sectors of the economy, including agriculture. 
  • An improvement in employment is also expected to fuel private consumption. Real GDP is projected to grow within the range of 5.0% to 8.0% during October–December 2021. However, a possible spike in COVID-19 cases and the reimplementation of more stringent containment measures, is still the major downside risk to the outlook.

(Source: PIOJ)