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Director General of the Planning Institute of Jamaica (PIOJ), Dr. Wesley Hughes, has said that the economy grew by 1.4 per cent for the January to March quarter, with agriculture, transport, storage and communication being the main growth sectors.
This brings real growth for the 2005/06 fiscal year to about 1.8 per cent, with the services sector estimated to have grown by 1.4 per cent and goods producing increasing by 1.9 per cent. The main sources of growth for the fiscal year were agriculture, construction and installation, electricity and water, distribution and miscellaneous services, including tourism.
Dr. Hughes, who was speaking at a press briefing held at the PIOJ’s New Kingston offices today (May 15), said that for January to March, agriculture, forestry and fisheries grew by some 24.7 per cent, reflecting a recovery following the 26.1 per cent decline in the corresponding quarter of last year, as a result of drought and hurricane conditions. In addition, domestic crop production grew by 18.6 per cent while export crop production substantially increased by 65.2 per cent.
Meanwhile, real gross domestic product (GDP) in transport, storage and communication grew by 1.3 per cent growth, based on increased activities at sea and air ports. This, the PIOJ head said, was evidenced by the increase in the volume of maritime cargo by 5.1 per cent, as well as 8.5 per cent and 3.3 per cent increases in air passenger movement at the Norman Manley International Airport and Sangster International Airport, respectively.
Miscellaneous services, he added, also trended upward by 6.6 per cent, with hotels, clubs and restaurants that comprise the services, increasing by some eight per cent, while financial and insurance services grew by 1.2 per cent for the review quarter, on account of the expansion in the volume of activities, associated fees, and commission income.
The distributive sector grew by 0.5 per cent, with the stock of loans and advances to the sector also increasing. As for electricity services, Dr. Hughes reported that the sector had growth of some 3.2 per cent, with electricity generation increasing by 4.5 per cent due mainly to non-Jamaica Public Service Company (JPSCo.) sources, which increased by 1 per cent.
Detailing areas of decreases, Dr. Hughes said livestock production declined by some 0.8 per cent, while the mining and quarrying sectors declined by 2.2 per cent. Even as crude bauxite production increased by 4.7 per cent, alumina production declined by 3.5 per cent due to strike action at the alumina plants, resulting in the loss of production of 19,800 tonnes of alumina, he informed.
Dr. Hughes further noted that the manufacturing sector declined by 2.1 per cent over the corresponding period in 2005. He explained that although the food, beverages, and tobacco category of manufacturing declined by 5.7 per cent, the other manufacturing component is estimated to have grown by 2.8 per cent, due to the rise in production of petroleum products.
Turning to construction and installation, Dr. Hughes informed that on account of cement supply constraints, and the resulting closure of construction sites and temporary loss of jobs, a decline of 6.3 per cent in the sector was recorded for the quarter.
Meanwhile, inflation for January to March was 0.1 per cent, with spending for housing up by 0.7 per cent, fuels and other household expenses up 2.8 per cent and personal clothing and accessories increasing by 2.8 per cent.
These increases were tempered by declines in the indices for food, which declined by 1.0 per cent and transportation, which went down 0.3 per cent. Dr. Hughes informed further that for the period, there was a fiscal surplus of $8.4 billion, which was less than what was projected, but it was $5.8 billion more than the same period in 2005. This, he said, was due to revenue being $0.5 billion less than budgeted, while expenditure was $6.5 billion more than budgeted.
In addition, the monthly average exchange rate depreciated by 1.2 per cent in nominal terms, which translates into a real depreciation of 2.5 per cent.
The monthly average exchange rate for March 2006 was $65.43:US$1.00 compared with $64.67:US$1.00 in December 2005