Our Business and Finance Editor, Kalilah Reynolds reports.
The worst quarterly decline in Jamaica’s history!
The Statistical Institute of Jamaica, STATIN, has released data showing the economy contracted by 18 percent for the second quarter of 2020, between April and June.
This means Jamaica is officially in a recession.
The decline is driven primarily by the continued spread of COVID-19 and the measures to combat it.
Reacting to the news on Twitter, Finance Minister Dr. Nigel Clarke said COVID19 has done to Jamaica what no hurricane has ever achieved.
He described it as the worst quarterly decline in Jamaica’ history.
The 18 per cent contraction for the April to June quarter will come as no surprise to many, and is in line with projections from the Planning Institute of Jamaica, PIOJ.
A recession is classically defined as two consecutive quarters of economic decline.
Prior to this, the Jamaican economy contracted by 14 per cent between January and March.
Several industries continue to struggle under COVID-19 protocols, and unemployment continues to be a problem.
According to STATIN, the services industries declined by 20-percent, while there was a 13 per cent fall off in the goods producing sector.
In the Services Industries, seven of the eight industries declined.
This includes an 85-percent fall off for hotels and restaurants, a 44-percent contraction in the category “other services”.
Producers of government services was the only service industry that went up, by a miniscule 0-point-2 percent.
In the Goods Producing Industries, lower levels of output were recorded across the board, led by Mining and Quarrying down 25 per cent, Construction down 14 per cent, Manufacturing fell by 12 per cent and Agriculture declined by 8 per cent .
STATIN says the performance of Agriculture was impacted by drought conditions and lower demand because hotels and some restaurants were closed.
Mining also continues to suffer from the negative impact of the closure of the Alpart Bauxite Plant in St. Elizabeth.
The PIOJ projects this contraction will continue for the remainder of the fiscal year and the country should return to growth in the 2021-2022 financial year.