The Planning Institute of Jamaica (PIOJ) says several key multi-billion dollar projects, which are likely to be implemented during the 2013/14 fiscal year, are expected to contribute significantly to economic growth projections, ranging between 0.5 and 1.0 per cent for the period.
This was stated by newly appointed PIOJ Director General, Colin Bullock, who presided over his first quarterly briefing on May 22, at the Institute’s New Kingston offices.
These developments, he informed, include the: $2.5 billion Major Infrastructure Development Project; $1.5 billion Sugar Transformation Programme; $1.3 billion Sandy Gully/Kingston Metropolitan Area (KMA) Drainage Project; $300 million Climate Change Adaptation and Disaster Risk Reduction initiatives; Highway 2000 North/South Link (Mount Rosser Bypass); and several energy projects, including the proposed 360-megawatt combined cycle plant, and a 115 megawatt facility to generate electricity from renewable sources.
Mr. Bullock also pointed to several other mega projects, currently at varying stages of negotiations, which he said, if implemented “as scheduled”, could “positively impact” the baseline growth projections for the fiscal year.
These include: the Harmony Cove development; phase two of the Fiesta development; several initiatives in medical tourism; as well as developments in the creative industries, information and communications technology (ICT), and energy diversification, with emphasis on renewable, such as coal and waste conversion.
While noting that the economy contracted by 0.5 per cent in 2012/13, with most sectors being impacted, save for hotels and restaurants; finance and insurance services; and the wholesale and retail trade, which recorded modest growth of between 0.2 and 1.0 per cent, Mr. Bullock was optimistic about a turnaround for 2013/14.
“The economy is expected to record a general recovery in most industries, including Agriculture, Forestry and Fishing (which declined by 2.0 per cent), and Mining and Quarrying (which fell by 9.6 per cent),” he indicated.
The Director General said further strengthening is also anticipated for the hotels and restaurant industries, while projecting growth for the construction sector.
Giving a review for the January to March 2013 quarter, Mr. Bullock said the economy contracted by 0.7 per cent, compared to the corresponding period last year.
This outturn, he explained, largely reflected the impact of: a weak global economic environment, particularly in Europe; adverse weather-related conditions, specifically the passage of Hurricane Sandy in October 2012, and the onset of drought conditions prevailing during the period, which recorded a 61 per cent reduction in the average rainfall; and sharp declines in the business and consumer confidence indices, which fell by 23 and 38 per cent respectively, relative to 2012.
The Director General said five of the main sectors – manufacturing; construction; transportation, storage, and communication; wholesale and retail trade; finance and insurance services, recorded growth for the period, ranging between 0.3 and 2.0 per cent. Agriculture, Forestry and Fishing accounted for the biggest decline recorded, contracting by 10 per cent.
Mr. Bullock said the economy is expected to remain flat for the April to June quarter, with continued contractions projected for Agriculture, Forestry and Fishing, and Hotels and Restaurants.
“However, this is expected to be mitigated by growth in the Mining and Quarrying, Construction, and Transport Storage and Communication industries. The improvement in the mining sector is predicated on increased capacity utilization by a major producer, while construction would be supported by increased capital outlay on major infrastructure development works,” the Director General stated.
Noting that preliminary data for April showed varying levels of contractions being recorded for electricity, tourism, and mining and quarrying, Mr. Bullock said the real growth for the April to June quarter is projected to range between -0.5 to 0.5 per cent.
Contact: Douglas McIntosh