Damage from Hurricane Melissa Estimated at Up to US$7 Billion

Damage to the country due to Hurricane Melissa is estimated at about US$6 billion to US$7 billion based on preliminary figures, says Prime Minister, Dr. the Most Hon. Andrew Holness.

In a statement in the House of Representatives on Tuesday (Nov. 4), Dr. Holness said that the figure is equivalent to about 28 per cent to 32 per cent of last fiscal year’s Gross Domestic Product (GDP).

He said that the hurricane will have a profound economic impact on the country, pointing out that it has struck the heart of Jamaica’s productive belt, significantly damaging and disrupting the tourism and agriculture sectors, the road network, housing, and other critical infrastructure across various parishes.

“I want the country to appreciate that we have never had a disaster of this magnitude with this economic footprint in terms of the impact, not Gilbert, not Ivan,” the Prime Minister pointed out.

“All of those were relatively small to our GDP. To lose 30 per cent of your GDP is significant,” he said.

The Prime Minister said that a temporary slowdown in economic activities, particularly in the most affected parishes, is anticipated.

“Agricultural output will decline in the short-term as farmers replant and livestock operations recover. The tourism sector, while resilient and working swiftly to reopen, will require targeted support to restore capacity and confidence. Small and medium-sized enterprises, especially those in retail, manufacturing and services, and the creative industries, have sustained significant losses and will need liquidity and recovery support to rebuild inventories, repair facilities and restart operations,” he pointed out.

He said that supply chains for food, construction materials and consumer goods are being actively restored, though some market disruption may occur in the immediate weeks ahead.

“A very preliminary estimate suggests that short-term economic output could decline by eight to 13 per cent. This means that revenues will decline as economic activities slows, even as expenditure must increase to finance emergency relief, recovery, and reconstruction. This will place pressure on our fiscal targets,” the Prime Minister told the House.

He assured that the Administration will act responsibly, transparently and with foresight to protect lives and livelihoods while preserving Jamaica’s hard won macroeconomic stability.

“We anticipate a rise in the debt-to-GDP ratio in the short to medium-term as resources are channeled into rebuilding and resilience. Yet, Jamaica’s record of disciplined fiscal management provides the credibility and space to respond decisively. The sacrifices that we have made and how this Government would have administered our fiscal affairs would have put us in the best position that this country would have ever been to respond to a disaster,” he said.

He informed that it will become necessary to activate the lawful provisions under section 48 C of the Financial Administration and Audit Act, which allows for the temporary suspension of the fiscal rules in certain circumstances of national emergency or extraordinary economic disruption.

Noting that 40 per cent of the island has been impacted from an economic perspective, the Prime Minister said it means that “the other 60 per cent of the island must double our economic output.”

He said that restoring economic activity must proceed alongside relief and restoration efforts.

“This is not insensitivity, it is necessity. Reviving production, reopening tourism, and restarting commerce are essential to restore incomes, rebuild confidence and mitigate the wider economic shock. Recovery is not just about clearing debris, it is about getting Jamaicans back to work and our economy back on its feet,” he said.

“We are already activating the fiscal and financial instruments available to us and engaging our international development partners to support the recovery efforts. Cash flow support to households, emergency social programmes, conciliation financing, targeted industrial assistance will form part of a responsible and discipline economic response,” he added.

The Prime Minister said that the detailed assessments of the hurricane damage are still underway and the final figures should be available in another few weeks.

He informed that the Minister of Finance and the Public Service, Hon. Fayval Williams, will provide further details to the House as the assessments are completed and funding packages finalised with multilateral and bilateral partners.