PIOJ Projects Fall in Poverty Rate

The Planning Institute of Jamaica (PIOJ) is projecting a fall in the poverty rate from 16.7 per cent to which it rose in 2021, representing a 5.7 percentage point increase relative to 2019.

Director General, Dr. Wayne Henry, notes that the out-turn reflected the adverse impact of the COVID-19 pandemic on household incomes and consumption, which “is in keeping with global and regional expectations and experiences”.

Dr. Henry indicated, however, that the impact was tempered by positive movements in the macro economy and social interventions by the Government and the private sector.

He was speaking during the PIOJ’s digital quarterly media briefing on Thursday (August 17).

Dr. Henry said the overall rise in poverty in 2021 was driven by increases in two regions, noting that the rate in the third was statistically the same.

He informed that the rate increased in the Greater Kingston Metropolitan Area by 5.7 percentage points and rural areas by 7.9 percentage points but remained relatively unchanged in other urban centres.

“Rural areas registered the highest rate at 22.1 per cent, followed by other urban centres at 15.5 per cent and the Greater Kingston Metropolitan Area at 10.4 per cent,” Dr. Henry outlined.

The Director General said COVID-19 negatively affected the lives and livelihood of persons, leaving a “legacy of rising poverty and widening inequality”.

“While the Jamaican economy recorded growth of 4.6 per cent in 2021, and employment increased by 8.3 per cent in July 2021 relative to July 2020, real GDP (gross domestic product) was still 5.8 per cent below its 2019 level and employment was 3.3 per cent below what it was in July 2019. These factors explain the higher poverty rate in 2021 relative to 2019,” he stated.

The World Bank estimated that in 2021 about 97 million more people were living on less than US$1.90 per day because of the pandemic, increasing the global poverty rate from 7.8 per cent to 9.1 per cent.

Additionally, 163 million more were living on less than US$5.50 per day.

Globally, three to four years of progress towards ending extreme poverty are estimated to have been lost.

In Jamaica, consumption expenditure data rather than income are used to measure poverty, due to the availability and relative accuracy of the statistics.

The rates are first calculated from household data at the regional level then aggregated nationally.

“Similar to most economies, Jamaica was still recovering from the COVID-19 pandemic in 2021. Going forward, the poverty rate is expected to fall, given the continued improvement in the economy, as reflected in the improvement in real GDP and employment,” Dr. Henry said.

The Director General informed that the rates for 2021 were compared with 2019, as no local estimate of poverty was available for 2020, nor was the Jamaica Survey of Living Conditions (JSLC) published in the latter year due to the pandemic.

Dr. Henry said the data to inform the 2021 poverty rate were collected over a five-month period from June to October 2021, a little over one year after the first case of COVID-19 was confirmed in Jamaica.

Meanwhile, the 2021 edition of the JSLC, which tracks the effects of social and economic programmes and policies, is being finalised and will be made available to the public following its tabling in Parliament by September 2023.