Economic Growth Occurs Against Downward Trend in Inflation and Stability of exchange Rate

Director General of the Planning Institute of Jamaica (PIOJ), Dr. Wesley Hughes, has said that the 2.7 per cent growth in the economy for the October to December quarter had occurred against a background of economic stability, including a continued downward trend in inflation, which was at 0.3 per cent for the period, and the relative stability in the exchange rate.
Dr. Hughes, who was providing a review of the country’s economic performance for the period at his Grenada Way offices in New Kingston yesterday (Feb. 15), said that while inflation had gone up in food and drink 0.4 per cent; meat, poultry and fish 2.5 per cent; vegetables and fruits 7.1 per cent; and fuel and other household supplies 1.7 per cent, the “downward movement in the price of crude oil influenced the decline in the indices for housing and other housing expenses, which was down by two per cent, while transport was down by 1.3 per cent.”
Meanwhile, the fiscal deficit for the quarter was $21.3 billion, which was $11.3 billion more than projected. “The fiscal deficit was broken down as $2.5 billion lower than programmed revenue, and expenditures of $8.8 billion higher than programmed,” he said, adding that revenues and grants totaled $51.7 billion during the quarter, while expenditure was $72.7 billion.
In relation to external trade, a deficit of just over US$3 billion was recorded for the January to October period, which was US$403 million more than the similar period for 2005. Imports increased by 20.1 per cent, while exports grew by 30.8 per cent.
The main growth area in export was crude material, mainly scrap metal accounting for 47.4 per cent, and mineral fuels, which accounted for 38.3 per cent.
On the matter of unemployment rates, Dr. Hughes said the figure of 9.6 per cent in October reflected some improvement. He noted that some seasonality was reflected in the movement, as this was below the 10.9 per cent recorded for October 2005. Meanwhile, the job seeking rate remained relatively stable at some five per cent, the PIOJ head said, “slightly up to 5.3 per cent in October 2006”.
Dr. Hughes said that in the short term, it was expected that the general positive trends in the economy would continue, with “overall growth in both the goods-producing and the services sector led by tourism, transportation, communication, construction, mining and agriculture. we expect that in the current quarter, the spin-off effects from Cricket World Cup 2007, should see some impact on the economy”.