STATIN Reports Lower Third Quarter Growth for Economy Than PIOJ

  • In November 2021, the Planning Institute of Jamaica (PIOJ) released its estimate of GDP which projected a 6.3% expansion for the Jamaican economy in the September 2021 quarter relative to the corresponding quarter of 2020. The estimated output in the Goods Producing and Services Industries was 2.8% and 7.3%, respectively. The performance was premised on a few key factors, including increased employment, both locally and in major trading partners; the easing of containment measures implemented to curtail the spread of COVID-19; increased vaccination globally; and the continuation of building projects and road construction works. 
  • However, official figures released by the Statistical Institute of Jamaica (STATIN) last week showed that the Jamaican economy grew by 5.8% during the third quarter of 2021 relative to the third quarter of 2020. This is below the 6.3% estimate for the quarter put forward by the PIOJ. This expansion stemmed from slightly lower growth outturns of 7.1% and 2.4% in the Services and Goods Producing Industries respectively. 
  • The growth in the Services Industries was due to improved performance in all eight (8) industries. However, Hotels & Restaurants led the recovery, registering an increase of 114.6%. The other major contributors to the performance in the Services Industries were Transport, Storage & Communication (+8.8%), Wholesale & Retail Trade; Repairs; Installation of Machinery & Equipment (+4.4%), Other Services (+12.2%), and Finance & Insurance Services (+2.3%). 
  • On the other hand, the performance of Agriculture, Forestry & Fishing (+7.3%) led to the increase in the Goods Producing Industries. Manufacturing (+4.6%) and Construction (+4.4%) also aided growth. The performance was, however tempered by Mining & Quarrying, which declined by 29.7%. The outturn in the Mining & Quarrying Industry can be explained by the fire which occurred at the JAMALCO plant on August 22, 2021. The fire will constrain the contribution of that industry to economic growth for at least the next two years.  
  • The growth outturn was a surprise to the downside and stemmed primarily from the thirteen ‘No Movement’ days that were implemented between August and September to help curb the COVID-19 outbreak that happened during the quarter. The implementation of the days brought commercial activity to a virtual standstill and as a result, weighed on the GDP performance during the period. 
  • For the December 2021 quarter, the PIOJ anticipates that the Jamaican economy expanded between 5.0% and 8.0%. All industries, except for the Mining & Quarrying industry, are expected to record growth. This is predicated on, the continued economic recovery in most industries following the relaxation of COVID-19 containment measures in Q4 2021 relative to the measures which were in place during the December 2020 quarter; the gradual re-opening of the economies of Jamaica’s main trading partners, which is expected to facilitate higher levels of external demand, particularly for tourism-related services; and higher levels of employment and the easing of the curfew times during December, which are expected to have supported an increase in demand.  
  • However, the downside risks to the outlook are the presence of the ever-evolving COVID-19 virus and the fire at JAMALCO’s refinery plant, which is expected to impact growth figures for at least the next eight quarters.

(Sources: PIOJ & STATIN)