- Government will have to place greater focus on the export of goods and services, rather than domestic consumption, to boost growth in the medium term.
- Depreciation in the exchange rate should actually mean that Jamaica’s exports become cheaper and more foreign exchange is earned.
- After six consecutive quarters of contraction, Jamaica has had two positive quarters back to back.
Government will have to place greater focus on the export of goods and services, rather than domestic consumption, to boost growth in the medium term.
This is the view of Vice President, Business Analytics, Portfolio Advisory and Product Development at the Scotia Group, Jason Morris, who said this will take time.
“If you think about the Jamaican economy, this has really been structured around importing everything and selling it here, and that is the reason, when the exchange rate depreciates, it hurts us so much,” Mr. Morris said.
He pointed out that depreciation in the exchange rate should actually mean that Jamaica’s exports become cheaper and more foreign exchange is earned, but the economy is not structured for that to happen.
Mr. Morris was addressing a recent Scotiabank Development Seminar in Mandeville on the topic: ‘Opportunities in a Challenging Environment’.
He argued that Government’s timely execution of a number of projects presented in last year’s budget, such as the Agro Parks, the US$1.5 billion industrial park in the logistics hub, and the US$350 million Major Infrastructure Development Project (MIDP), should impact growth.
Mr. Morris added that initiatives to reduce high electricity costs; increasing the speed of approving permits; controlling crime; continued improvement in the ease of paying taxes; and the timely execution of strategic investments, such as casino gaming and integrated resorts, and the logistics hub, are also important to boost medium term growth.
He pointed to positives in the economy, noting that after six consecutive quarters of contraction, Jamaica has had two positive quarters back to back.
“In December 2008 we were running at 4.5 per cent in terms of the level of contraction, so coming back to 1.5 to 2 per cent (means) we are nowhere close to where we want to be, but we are heading in the right direction,” Mr. Morris said.
He highlighted other positives, including an improving Net International Reserves (NIR), which now stands at US$1.07 billion; improvement in foreign direct investment flows, estimated to be US$414 million at the end of 2013; and an upward trend in the Gross Domestic Product (GDP).