Jamaica Is Hot! Business Leaders Upbeat About Economy

There is heightened business confidence in the economy coming out of the presentation of the 2023/24 Budget Debate, where Government outlined its development priorities, including planned expenditure in key areas such as security, roads, water, and housing.

Business leaders are optimistic that the trillion-dollar budget, which was presented against the background of the country’s full recovery from COVID-19, will accelerate expansion of the economy, which is experiencing record low unemployment and unprecedented levels of output in key sectors such as tourism and agriculture.

Private Sector Organisation of Jamaica (PSOJ) President, Metry Seaga, says he is anticipating that 2023/24 will be “a good year”.

“Positive things are happening. Our economy is growing and our unemployment is at its lowest level ever. I think Jamaica, as a nation, is hot and people want to come here to invest,” he tells JIS News.

Mr. Seaga adds that “we seem to be achieving things that nations much more powerful than ourselves have not been able to achieve. We have recovered from COVID-19 and that’s one of the things that are evident”.

The economy is estimated to have expanded by 3.4 per cent in the fourth quarter of 2022 signaling the country’s recovery from the COVID-19 pandemic.

Gross domestic product (GDP) was 5.8 per cent for the third quarter of 2022,4.8 per cent in the second quarter, and 6.5 per cent in the first quarter.

This follows economic expansion of 6.7 per cent in the fourth quarter of 2021, 5.9 per cent in the third quarter of 2021 and a record 14.2 per cent recovery in the second quarter of 2021.

Jamaica achieved its lowest ever unemployment rate of six per cent in April 2022, with figures for the month also showing that 1,269,300 persons were employed, which is the highest number of individuals holding jobs in Jamaica’s recorded history.

Post-COVID-19 job creation and restoration out-turns have surpassed the over 150,000 jobs lost during the pandemic.

Additionally, Jamaica’s debt level, which reached 110 per cent of GDP in the aftermath of the pandemic, is now lower than it was prior to COVID-19.

Noting sentiments suggesting it would have taken Jamaica five years to recover and emerge from the COVID-19-induced fallout, Mr. Seaga emphatically declares that “we are back, with a bang… less than two years [after the onset of COVID-19]”.

Consequently, he says he is upbeat about the prospects of Jamaica’s post-COVID-19 economic growth continuing in 2023/24.

“Where we are located in the Americas… gives us [a] significant advantage for [attracting] many different industries… none the least being a Global Logistics Centred-economy,” he tells JIS News.

“I’m optimistic and hopeful… that we [will] continue to have confidence in the greatness of our country. It’s now up to the private sector to use this platform that has been set by the Government and make the investments and help Jamaica to stay on this great track that we are on,” the President adds.

Meanwhile, Mr. Seaga says the Government’s $1-trillion budget suggests that Jamaica’s fiscal and monetary positions are “in good stead”, resulting from the fact that “we did all of the hard work over the last couple of years”.

He describes the announcement of no new taxes as a “very good development”, while highlighting several other standout areas.

These include implementation of the $40-billion ‘Shared Prosperity through Accelerated improvement to our Road networK’ (SPARK) programme, to rehabilitate up to 2,000 roads over three years which Mr. Seaga says is “positive”, adding the fact that the money is coming out of our budget and is not borrowed is important.

The Government has also allocated $6.9 billion for road and bridge repair and maintenance and $1 billion to build three new bridges.

Mr. Seaga also welcomes plans to transition several government employees from contract to full-time employment as “critically important”.

He further highlights the public-sector compensation restructuring exercise, noting that “it is an important one and needed to happen”.

“It’s not without its hiccups. But I think the hard work that needed to be done has been done. I think it’s… certainly the start of… an important exercise for us, moving forward; that’s positive,” the PSOJ President adds.

Mr. Seaga also welcomes adjustment in the general consumption tax (GCT) regime for the sale of used cars, which will see dealers paying a rate of 15 per cent on markup prices, as well as the elimination of GCT on the importation of live horses, small ruminants and pigs.

“I think all of that has come from the fiscal space that we have. I have a great deal of confidence in… where [the Government] has positioned us as a country and the direction where we seem to be going,” he added.

Jamaica Employers’ Federation (JEF) President, David Wan, who is equally upbeat, also anticipates that 2023/24 is “going to be a good year”, especially for tourism, which he expects will experience a continued boom.

This, he tells JIS News, particularly in light of the ongoing conflict between Ukraine and Russia, among other areas experiencing disturbances.

“I expect that a lot of Americans, who [comprise] 70 per cent of our [tourist] market, are going to choose nearer destinations [like Jamaica]… for their vacations. I think Americans are a little more reluctant to travel very far… because, maybe, people are a little more nervous about what’s going on globally. So, tourism is going to continue [its good run],” he tells JIS News.

Mr. Wan also cites several positives in the Government’s budget, key among which are the non-imposition of new taxes and corresponding $153.33-million revenue concession from the proposed income tax credit to be extended on residential solar photovoltaic system installations and the proposed elimination of GCT on imported live animals.

“That’s giving $153.33 million back to the public… so that’s good,” he tells JIS News.

Mr. Wan also cites the SPARK programme; ongoing Central Bank Digital Currency (CBDC -JAM-DEX) rollout, announcement of the Students’ Loan Bureau (SLB) non-guarantor requirement for Programme of Advancement through Health and Education (PATH) student applicants, and provisions in relation to the used-car sales industry as other notable takeaways.

The Government also announced a 44 per cent raise in the national minimum wage, increase in the National Housing Trust (NHT) loan limit from $6.5 million to $7.5 million for a single applicant, and $15 million for two applicants up from $13 million, with three co-applicants accessing $21 million up from $19.5 million.

There are also provisions to improve education and skills training, with HEART trainees up to level four no longer required to pay fees as of April 1; and increase in the weekly pension benefits from $1,700 to $3,000, with those who receive $2,550 per week to get $3,500 per week, and those at the top to receive $4,200 up from $3,400.

Mr. Wan says based on these and other developments, “economic recovery from COVID-19 will continue”.

Both Presidents also weigh in on Jamaica’s credit rating being improved to ‘Positive’ by global agency, Fitch.

Mr. Seaga describes the announcement as “critically important, in the scheme of things”.

“A lot of people don’t understand how important that is. People look at our ratings when they are investing their money, internationally and locally, and that’s a big deal,” he points out.

Mr. Wan says Fitch’s outlook for the Jamaican economy suggests that “things are looking positive”.