A 'Gross' Decline in the Economy in Q3

  • Data from the Statistical Institute of Jamaica (STATIN) revealed that real value added (RVA) for the Jamaican economy contracted by 3.5% in the third quarter of 2024 (Q3 2024) compared to Q3 2023. The 3.5% contraction was due to declines in the Services and Goods Producing Industries of 2.2% and 7.2%, respectively, and was deeper than the 2.8% dip estimated by the Planning Institute of Jamaica (PIOJ).
  • Hurricane Beryl’s July 2024 landfall was a major reason for the Q3 2024 economic contraction, especially for goods-producing industries. Most notably, the Agriculture, Forestry & Fishing industry was affected by heavy rains and wind, which damaged mature crops, hindered harvesting, and delayed planting. The Mining & Quarrying industry was also affected by significant damage to one of the major alumina-producing plants.
  • Beryl also negatively impacted the performance of both the Electricity and Water Supply and Other Services industries. Damage to the island’s energy infrastructure delayed power restoration across several parishes and reduced electricity and water consumption.
  • As a result, RVA declined in all the Goods Producing Industries. Agriculture, Forestry, & Fishing fell by 12.5%, Mining & Quarrying (17.4%), Manufacturing (4.0%), and Construction (3.3%).
  • Furthermore, the RVA for most service industries contracted in Q3 2024. ‘Wholesale & Retail Trade, Repairs, Installation of Machinery & Equipment’ (-3.0%), Hotels & Restaurants (-6.2%), ‘Real Estate, Renting, & Business Activities’ (-3.2%), Producers of Government Services (-0.5%) and Other Services (-6.5%) all contracted. However, Finance & Insurance Services (+0.8%) and ‘Transport, Storage & Communication increased’ by (+2.5%).
  • Relative to Q2 2024, the economy contracted by 1.8%, reflecting declines in both the Goods-Producing (4.5%) and Services (0.8%) Industries.
  • Following the Q3 contraction, Jamaica’s economic outlook for Q4 2024 is negative due to the lingering effects of Hurricane Beryl, Tropical Storm Rafael, heavy rainfall and the U.S. State Department’s Level 3 Travel Advisory. Considering these after-effects, the PIOJ expects economic growth measured by Real GDP to fall within the range of -1.5% to 0.0%. If Jamaica’s economy contracted for a second consecutive time in Q4 2024, it would meet the technical definition of a recession.

(Sources: STATIN & NCBCM Research)