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Record Number Of New Business Registrations In 2020/21

By: , March 19, 2021
Record Number Of New Business Registrations In 2020/21
Photo: Donald De La Haye
Prime Minister, the Most Hon. Andrew Holness, speaking during his contribution to the 2021/22 Budget Debate in the House of Representatives on March 18.

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Prime Minister, the Most Hon. Andrew Holness, says that more new companies and businesses were registered in the 2020/21 financial year than at any other time in the country’s history.

“This says something about what is happening with small businesses and people seeking to formalise themselves in the economy,” he said, in his contribution to the 2021/22 Budget Debate in the House of Representatives on Thursday (March 18).

The Prime Minister noted that despite the negative impact of the coronavirus (COVID-19) pandemic, which resulted in the contraction of the economy, some areas performed well.

He cited, for example, the growth of the construction sector.

“While the sector was hit hard during April to June 2020, declining by 14.5 per cent, it grew by seven per cent in the July to September quarter, and is forecasted by the Planning Institute of Jamaica (PIOJ) to grow by 6.2 per cent in the October to December 2020 quarter,” he said.

Further, he noted that the unemployment rate, which had moved from a low of 7.2 per cent in October 2019 to 12.7 per cent in July 2020, has already started to decline to 10.7 per cent as at October 2020.

“This is a good sign. Still very high, but trending in the right direction,” the Prime Minister said.

He noted, as well, that remittance inflows grew by US$600 million, which is a 23 per cent increase over the previous year.

“Our current account deficit is estimated to be flat at 1.7 per cent of gross domestic product (GDP) for 2020/21, versus 1.6 per cent of GDP in 2019/20. Our net international reserves have been maintained at a robust level of over US$3 billion,” he said.

Mr. Holness pointed out that “no previous administration has ever faced a health and economic crises of the magnitude of COVID-19, which have tested our mettle as a government and as a people”.

“But we have shown courage, dexterity in management and incredible resilience of which we can justly be proud as a country. I am confident that we will recover, faster, stronger and better than before,” he said.

In the meantime, Mr. Holness noted that the PIOJ’s projections are that the economy contracted by approximately 10.2 per cent for calendar year 2020 and 12 per cent for fiscal year ending March 31, 2021.

“This is the largest annual decline on record and was the first annual contraction since 2012,” he said, noting that the economic decline in 2020/21 was driven by a massive 70 per cent contraction in the tourism industry.

“The pandemic has decimated our foreign exchange inflows from tourism, which are projected to fall by 74 per cent or US$2.5 billion [in 2020/21]…This level of fallout is unprecedented in our history,” he said.

He noted that the economic decline also resulted in a massive fallout in government revenues to the tune of $70 billion or 12 per cent, compared with the previous fiscal year, noting that, at the same time, expenditures increased.

“Approximately $40 billion was spent by central government on the COVID Allocation of Resources for Employees (CARE) Programme, health expenditure, support of public bodies affected by the pandemic and incremental compensation expenditures, particularly in health and security.

He noted that this sum does not include the expenditures on programmes implemented by the National Housing Trust (NHT) and other public bodies to help cushion the impact of the pandemic.

Last Updated: March 19, 2021

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