Tourism Growth to Contain Jamaica's Current Account Deficit in 2022
- Fitch Solutions estimates that Jamaica’s current account deficit will narrow to 0.2% of GDP in 2022, from an estimated 0.7% in 2021, as a recovery in tourism will drive services export growth in the coming quarters.
- This is a revision from a surplus of 0.8% previously, as the ongoing spread of COVID-19 hampered the rebound of the tourism sector more than expected. Moving into 2022, it is expected that sustained services export growth and elevated remittances will narrow the current account deficit.
- The tourism industry is expected to make a stronger recovery in 2022 than in 2021, widening Jamaica’s services trade surplus to USD0.6Bn, from USD0.4Bn, equivalent to 4.2% of GDP. In 2021, the surges in COVID-19 cases globally delayed growth in the sector. It is expected that disruptions in tourism travel will decline in the coming quarters as the current Omicron surge wanes and vaccinations continue to proceed in Jamaica and source markets, accelerating the rebound of the sector.
- It is forecasted that overnight stays will grow 48.7% in 2022, compared to 24.2% in 2021, though the industry will not fully recover to pre-pandemic levels until 2024. US airline operators like American Airlines and JetBlue are planning to increase their flights to Jamaica beginning in June 2022, driving inbound visitor arrivals in H222 in particular. This will support the growth in Jamaica’s services exports in 2022 and therefore the narrowing of the deficit.
(Source: Fitch Solutions)