Fitch Forecast 5.2% Growth In 2023

• Fitch forecasts real GDP growth for Jamaica will accelerate to 5.2% in 2023, owing partially to a low statistical base from weak growth in 2022. Net exports will be the main growth driver in 2023, adding 2.7pp to headline growth, according to Fitch’s forecasts.
• This will be due to a lower energy import bill, reducing imports in value terms. It will also be a function of a brighter outlook for the tourism sector. Fitch forecasts that tourism receipts will rise to 19.9% of GDP in 2023, as declining inflation in the US and Canada supports real incomes, boosting demand for price-elastic services like tourism.
• Remittances normally account for over 20% of GDP in Jamaica and stand to have an improved year, amid lower inflation and improving labour market conditions in key source markets such as the US, UK and Canada.
• Although Fitch sees fixed investment (0.3pp) and government spending (0.3pp) having a muted impact on growth, amid higher borrowing costs and an elevated government debt load (95.8% of GDP in 2023), it sees private consumption adding 2.0pp to growth. This will reflect lower inflation, supporting real household incomes. Additionally, inflation is forecasted to slow and average at 7.8% in 2023, as global oil prices fall slightly to an average of USD100.00/bbl in 2023 and supply chain disruptions gradually ease.

(Source: Fitch Solutions)