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Director General of the Planning Institute of Jamaica (PIOJ), Dr. Wesley Hughes, has said that the Jamaican economy grew by some 2.8 per cent for the period April to June 2006.Dr. Hughes, who was addressing the Institute’s quarterly press briefing yesterday (Aug.17) at his Grenada Way office in New Kingston, attributed the growth to the strong recovery in agriculture and tourism.
While tourism and leisure grew by 19.5 per cent, with tourists spending some $447 million over the three-month period under review, agriculture was the star performer, he said, having recovered from a severe drought to record a 17 per cent growth.
Dr. Hughes said the strong performance of the agriculture sector was due to more favourable weather conditions, which saw domestic crop production growing by 24.2 per cent, while export crop production increased by 15.8 per cent.
The mining sector also had a significant turnaround, with a 1.4 per cent increase after two consecutive quarters of decline. Dr. Hughes said that the increased demand for alumina in China, which is experiencing a boom in its productive sectors, improved mining technologies, and a more stable industrial environment, had favoured a 7.7 per cent increase in bauxite production in Jamaica.
Manufacturing and construction however, continued to struggle, as cement production had declined by more than 19 per cent, causing a corresponding 3.5 drop in activity in the construction sector. Food, beverage and tobacco production also declined by 7.7 per cent, which Dr. Hughes attributed to the fact that Jamaica had ceased to be a cigarette producer. Other manufacturing, however, grew by 6.5 per cent, due to operations at the Petroleum Refinery.
On other sectors, Dr. Hughes reported that transport, storage and communication registered a 3.5 per cent increase, while electricity and water grew by 2.2 per cent. Dr. Hughes also spoke of “a quiet revolution” in the transport services sector, with increased activity at the sea and airports in relation to tourism and trade. Cargo movement volume increase by about 6.1 per cent,” he informed.
Dr. Hughes said that the positive macroeconomic performance, should be seen within the context of low inflation rate of 2.8 per cent, stability in the foreign currency exchange rate and increased revenue intake, which was $1 billion more than projected.
Furthermore, Dr. Hughes said, “the fiscal deficit has performed better than projected.at $2.5 billion less than programmed and $4.5 billion less than recorded in the corresponding period of 2005 and that is moving in the right direction.”
He opined that “the economy will remain positive for the future quarter” owing to “the continued growth in tourism and agriculture and a return to expansion in construction sector, should be the main domestic drivers.”