The Planning Institute of Jamaica (PIOJ) is projecting moderate growth in the region of one per cent for the January to March 2013 quarter.
Acting Director General of the PIOJ, Everton McFarlane, said the economy is expected to record low growth, with most industries forecast to record positive performances.
“This is predicated on a general recovery from the subdued performance recorded in the January to March 2012 (quarter). Notably, the drag on growth from the mining sector should be substantially eased during the January to March 2013 quarter. However, growth in the domestic economy will be tempered by the continued weak performance in the global economy,” he said.
Speaking at the PIOJ’s quarterly media briefing at the institute’s New Kingston offices on February 21, Mr. McFarlane noted that Finance and Insurance was one of two sectors recording growth during the October to December 2012 quarter.
He said the sector grew by an estimated one per cent, while advising that Wholesale and Retail Trade/Repair and Installation of Machinery (WRTRIM) was the other sector recording growth during the period, up 0.4 per cent.
Mr. McFarlane said growth recorded in Finance and Insurance was due largely to increases in net interest income on the stock of loans at deposit taking institutions, as well as fees and commission income.
“The stock of loans and advances outstanding at commercial banks amounted to $307.5 billion, an increase of 15.6 per cent, compared with the end of December 2011. Of this amount, credit to the private sector accounted for $282.2 billion, representing an increase of 16 per cent,” he outlined.
Mr. McFarlane said real value added growth in the wholesale and retail trade/repair and installation of machinery resulted from increased expenditure associated with preparatory activities for hurricane Sandy, which impacted the island in October 2012.
This, he informed, was evidenced by higher values of automated banking machine (ABM) and point-of-sale transactions, and a higher stock of loans for personal consumption.
Higher sales were recorded in four of the nine categories accounting for 47 per cent of total sales. These were: minerals, fuels, lubricants and petroleum products, up 8.6 per cent; hardware, building supplies and electrical goods, up 15.9 per cent; chemicals, pharmaceuticals and cosmetics, up nine per cent; and furniture, furnishings, and office equipment, up 30.1 per cent.
These figures stood out against the background of an inflation rate of 2.6 per cent, and a 0.6 per cent contraction in overall real growth recorded for the period, during which activities in several sectors declined
Industries registering declines, ranging between 0.1 and 11 per cent, included: agriculture, forestry and fishing; mining and quarrying; manufacturing; construction; transport, storage and communications; and hotels and restaurants.
Agriculture, forestry and fishing contracted by 4.5 per cent to record its first quarterly decline since the October to December 2010 period, when the sector was impacted by tropical storm Nicole.
This time the decline was due to the protracted period of drought between June and July; and hurricane Sandy in October, which caused damage to the sector, estimated at $1.5 billion. There was an increase in animal farming, which rose by 4.6 per cent.
Another area which declined was Mining and Quarrying, down by 11 per cent, largely reflecting reduced demand from one of Jamaica’s main export markets, North America.
“This resulted from the relatively low prices prevailing on the international market, which curtailed demand for alumina from Jamaica due to the comparatively high cost of production locally,” he stated.