Increased Imports To Widen Jamaica's Current Account Deficit, Despite Strength In Tourism Sector  

 

  • Fitch Solutions forecasts that Jamaica’s current account deficit will grow to 4.2% of GDP in 2022, before shrinking to 2.8% in 2023. Jamaica recorded a current account deficit of USD333.0Bn in Q122, up from USD50.6Bn in Q121, as a wide goods trade deficit offset a recovery in services exports and strong remittance inflows.
  • In the year through March 2022, goods imports have already grown 48.0%, strongly outpacing the 5.0% contraction in exports. Import growth thus far in 2022 has been driven by fuels, consumer goods, and food, all of which have become increasingly expensive due to elevated global commodity prices and supply chain disruptions, which particularly affect an island economy like Jamaica.
  • Fitch expects the goods trade deficit will remain elevated through 2022, due to weaker mining exports and high import costs which will lead to import growth of 33.0% y-o-y. 
  • Moving into 2023, it is expected that further recovery in the service industry, lower commodity prices and robust remittances will narrow the overall deficit.

(Source: Fitch Solutions)