Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, says prospects for a return to economic growth in Jamaica in short order are “strong”.
He said this is largely against the background of news about the possible availability of a coronavirus (COVID-19) vaccine for Jamaica and several other countries that are among the island’s main trading partners.
These include the United Kingdom (UK), Canada, and the United States of America (USA) .
The Planning Institute of Jamaica (PIOJ) and Bank of Jamaica (BOJ) estimate that the local economy will contract by between 10 and 12 per cent for the 2020 calendar year and 2020/21 fiscal year, consequent on the resulting fallout from COVID-19, but expect a rebound commencing in 2021/22.
Key stakeholders, including the International Monetary Fund (IMF) and several credit rating agencies also anticipate that growth in the Jamaican economy will return during the next fiscal year.
Speaking during a media briefing at the Finance Ministry on Thursday (December 10), Dr. Clarke explained that the current contraction is not the result of structural factors, but rather, the inability of persons and entities to move about freely to engage in economic activities “as they normally would” due to COVID-19 .
He noted that the service industry has borne the brunt of the impact, while acknowledging that other areas of commercial and economic activities have also been severely affected.
“The service [industry] is the largest part of the Jamaican economy. It accounts for about 70 per cent of economic output and consists of everything from wholesale and retail shops and mechanic shops… as well as food service and restaurants, the tourism sector… [and] business process outsourcing,” the Minister noted.
He said that consequent on COVID-19 safeguards and other factors, a significant number of consumers “are probably consuming less of those services today, because [they are spending] a lot more time at home”.
“The good news about a vaccine being available… [is that it]… offers the prospects of a return to levels of economic activity that can support economic growth,” Dr. Clarke added.
He noted that as restrictions are eased and “persons can freely assemble and congregate and a vaccine becomes available, then economic activity will naturally pick up”.