THE PLANNING Institute of Jamaica (PIOJ), reported yesterday that the economy continued to recover and grow for the first three months of the year, with economic activity expected to remain buoyant during the April-June quarter.
In a review of the economic performance for the quarter January to March 2003, PIOJ showed that the country's real GDP (total earnings from production), grew by an estimated 3.4 per cent relative to the corresponding period of 2002. The goods production sector increased by 2.2 per cent and the services sector went up by 4.8 per cent.
Dr. Wesley Hughes, the PIOJ's director-general, said that the recovery took place against the background of a challenging macroeconomic environment characterised by further exchange rate adjustments and higher interest rates.
"Despite this," he said, "inflation remained at a record low of -0.4 per cent, the lowest quarterly increase since the 1960s."
In delivering a presentation titled "Review of Jamaica's Economic Performance" for January-March 2003, Dr. Hughes said the economy suffered major setbacks from the September 2002 floods which had a devastating effect on agriculture, as well as fears of a downturn in visitor arrivals associated with the United States-led war on Iraq.
However, he said that compared to last year both agriculture and tourism rebounded, with the growth in agriculture reflected in increased production in both domestic and export crops. The agriculture sector grew by 5.1 per cent compared with last year.
He said that stop-over, cruise and total visitor arrivals increased by 7.2 per cent, 46.9 per cent and 24.5 per cent, respectively, compared with the similar period in 2002. Visitor expenditure was also up by 12.4 per cent.
Those results, he said, were reflected within the goods-producing sector and the services groups. Within the goods-producing sector, the main growth sectors were agriculture and the mining and quarrying sector which grew by 5.1 per cent and 4.9 per cent, respectively.
In the services group the main contributors to growth were the financial institutions, transport, storage and communications and miscellaneous services including tourism, growing by 12.5 per cent, 5.0 per cent and 6.6 per cent, respectively.
PIOJ projected that for April to June 2003, real GDP is expected to increase by 3.5 per cent while growth is expected from all sectors except manufacturing.
Manufacturing exports like other tradeable sectors though, are expected to benefit from increased competitiveness resulting from exchange rate depreciation.
Inflation is also expected to accelerate reflecting the impact of the exchange rate depreciation, removal of GCT exempt status from specified products and the two per cent across-the-board cess.
