Business Leaders Cautiously Optimistic

Business leaders are cautiously optimistic about the prospects of Jamaica’s continued recovery from the economic fallout sparked by the novel coronavirus (COVID-19) pandemic to generate current growth projection outturns.

Their outlook is largely based on the Government’s discontinuation of restrictions under the Disaster Risk Management Act (DRMA) to contain COVID-19 transmission, including curfews and lockdowns.

This, they believe, will aid in fuelling the anticipated outcomes by facilitating increased commercial activities.

Prime Minister, the Most Hon. Andrew Holness, announced the revocation of Orders under the DRMA and the issuance of a new Order under the Public Health Act.

The new Order – the Public Health Enforcement Measures (Coronavirus [COVID-19] Order 2022) – was announced during his 2022/23 Budget Debate presentation in the House of Representatives in March.

The Planning Institute of Jamaica (PIOJ) estimates that 2021/22 fiscal year growth will range between six and nine per cent, and three to six per cent for 2022/23, with pre-pandemic out-turns anticipated for 2023/24.

Bank of Jamaica (BOJ) forecasts are for growth of seven to 10 per cent for 2021/22, before moderating in the range of two to four per cent for 2022/23.

Data from the Statistical Institute of Jamaica (STATIN) show that after declining by as much as 10.7 per cent during the July to September 2020 quarter, the economy recorded a 14.2 per cent out-turn for April to June, and 5.8 per cent for July to September and 6.7 per cent between October and December last year.

Business interests are, however, mindful that the Russia-Ukraine conflict could potentially stymie these projections and encouraging out-turns.

This, by compounding issues related to the lingering pandemic, among these global logistics and supply chain challenges, which have been having a ripple effect on countries worldwide, while they note that the effect of war was already manifesting in unstable global oil prices.

Jamaica Chamber of Commerce (JCC) President, Ian Neita, says the welcome discontinuation of the restrictions should serve to spur the level of commercial activities, previously limited under the containment measures, that potentially translates to growth.

“We are really looking forward to that, particularly in… the sectors that have been hardest hit. So, whether it’s entertainment [or] whether it’s tourism, we should see a revival in those industries,” he tells JIS News.

Mr. Neita notes that with the Government taking steps to further open the economy to facilitate increased commercial and recreational activities, including entertainment, “we can plan a lot better… whether it’s events or… investment decisions that may have been put on hold,” he adds.
He points out, however, that considering the lingering pandemic, among other factors, “we’re not so sure [of what next to expect].”

“So, what I would say is we’re cautiously optimistic in respect of all the factors that are coming at us,” he says.

Business analyst, Warren McDonald, says he anticipates positive out-turns, especially from tourism, as “people are eager, now, to take a holiday and go on vacation”.

Mr. McDonald argues that the Government’s decision to discontinue COVID-19 restrictions and facilitate the full resumption of activities across sectors, including the entertainment industry, which contributes significantly to the economy, “is a positive move”.

“So, I think we need to prepare ourselves to be part of this ‘bumper’ return to some sort of normality,” he tells JIS News.

Mr. McDonald cautions, however, that the conflict in Europe and the lingering pandemic remain potential threats to the projections and expectations.

“I think [we might see] a very moderate growth [out-turn] this year… somewhere in the range of two to three per cent, [which] is a [more] realistic figure,” he adds.

Jamaica Manufacturers and Exporters Association (JMEA) President, John Mahfood, who notes that he was initially optimistic about low growth for 2022, says developments, particularly relating to the war, now create an element of uncertainty regarding the possible out-turn.

“If [the war] lingers, I think it will impact significantly on our growth [targets and out-turns]. If things stabilise there soon, [that would put us] back on a positive track. So, we’ll just have to wait and see how things fare,” he adds.

Meanwhile, Mr. Mahfood is upbeat about the extent to which discontinuation of the COVID-19 restrictions will yield positive outcomes.

“I think it is going to have some positive impact and will be beneficial to the people and economy in terms of generating additional earnings and employment. This should serve to counter some of the economic challenges we have been experiencing,” he tells JIS News.