Jamaica economy to growth 'at least 2% per year from 2018/19'

The World Bank has said that Jamaica is poised to generate increased economic growth of 2% or more each year by 2018/19.

The organisation’s lead economist, Philip Schuler, says this projection is based on the government’s prudent fiscal stance and the resulting stable inflation rate.

Improvements in the country’s current account balance and heightened business confidence, which is expected to generate significant new investments, are also factors.

This praise follows protracted periods of volatility in Jamaica.

Schuler noted that apart from “a couple of bad quarters” in 2014, there have been notable growth and improvement in key areas, such as the gross domestic product (GDP) and employment.

Current account

Schuler pointed to the current account balance, which improved from a deficit of 10% of GDP in 2012/13 to just under 1% in 2016 – the best out-turn in 20 years.

“If you look at the components of that [not only does] it reflect growth in net exports and services [for] both tourism and business process outsourcing, but also a declining trade and merchandising trade deficit and lower oil prices,” he said.

The World Bank executive also highlighted improvements in the budget which he noted successive administrations have been able to balance since 2013, consequent on the declining national debt, resulting in a reduction in the deficit, which he forecasts will further improve.

Where Government expenditure increased over the five-year period, this was matched with significant revenue inflows, Schuler said.

The government’s total expenditure for the 2016/17 fiscal year was JM$503.4 billion, while revenue intake was JM$458.3 billion.