Local financial experts sceptical of growth

By Andrew Green, Staff Reporter

Ross, Evans and Clarke

JAMAICA'S improved economic growth prospects appear to be among the victims of the terrorist attacks in the United States, say leading economic observers.

Finance Minister Dr. Omar Davies had given a three per cent growth estimate for this financial year during his budget presentation. It now appears uncertain whether the island will achieve any growth at all.

"Growth is quite likely to be a casualty," said Charles Ross, chief executive officer of Sterling Asset Management Limited. "If we have a weak second half of the year in tourism, it is very unlikely that we will see growth in the overall economy this year."

Hotels are now struggling to cope with booking cancellations and staff cuts are taking place while hotel closures for 'refurbishment' have been announced. Many potential vacationers are terrified of flying, following the use of passenger aircraft to carry out terrorist attacks in New York and Washington.

Economist Omri Evans said, "New York alone accounts for 18 per cent of stopover tourist arrivals in Jamaica." This amounts to 12.5 per cent of total tourist arrivals for the island.

Disruption there following the destruction of the World Trade Center in that city will cut tourist traffic from the destination, Dr. Evans said. "Travel out of New York will be down substantially."

And given the global economic slowdown now under way, "tourist arrivals could be down 30-40 per cent over the next six months," Dr. Evans said. If the proposed military action by the United States does not resolve the present uncertainty in the minds of travellers, the period of slowed arrivals could last for up to a year.

Tourism is a "motor" of economic growth for Jamaica, said Mr. Ross. If it, along with other goods and services exports are hit, "there will be a downward pressure on the economy."

The "drastic fall" in travel and tourism will have negative effects for the Jamaican economy, said University of the West Indies economics lecturer Damien King. But he said it was difficult to quantify the impact as "this is unprecedented."

Jamaica Manufacturers Association president, Clarence Clarke, said he was "hopeful" Jamaica would achieve a growth level similar to the 0.8 per cent achieved last year. However, he said, "this is from being very optimistic."

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