By Dennise Williams, Staff Reporter 
Hughes
THE PLANNING Institute of Jamaica (PIOJ) presented their quarterly review of economic performance of the Jamaican economy on November 14th at their Grenada Way headquarters. Their research of the various sectors of the economy revealed that the overall real Gross Domestic Product (GDP) of the country grew in the third quarter of July September 2003 by an estimated 1.2 per cent when compared to figures released for the corresponding period in 2002.
The growth estimates were driven by the services sector, which grew by 2.3 per cent minus the decline of 0.9 per cent in the goods-producing sector. However, for the first nine-months of the year, real GDP growth is estimated to by at 2.1 per cent. Again, growth was fuelled by the services sector, which grew from January to September 2003 by 2.8 per cent.
SCEPTICAL
However, members of the audience were a bit sceptical that this was actually good news when compared to the growth rates of the United States and Western Europe. In response, Dr. Wesley Hughes, Director General of the PIOJ stated, "we can't do a song and dance about 2 per cent growth rates, but it is better than 0 per cent or a decline." Comparing figures gathered in the relevant 2002 period with 2003, the main contributors to GDP growth for January to September were:
Agriculture - 4 per cent growth
This was borne out by normal weather patterns, as compared with last year where farmers faced drought conditions.
Mining & Quarrying - 4.9 per cent growth
Dr. Hughes stated that currently the Bauxite industry is working at 97 per cent capacity and is seeking to expand its capability for greater production levels.
Transport, Storage & Communications -3.9 per cent growth
The continued demand for cellular products and services was the engine of growth for this sector. Additionally, Dr. Hughes stated that the increase in tourist arrivals meant that the transportation industry was positively affected.
Electricity & Water - 4.9 per cent growth
This growth is explained by the higher levels of electricity generation. Interestingly, water production declined by 1.4 per cent. Dr. Hughes explained this as being linked to higher levels of rain that creates silt that clogs the water distribution systems.
Finance & Insurance Services - 5.9 per cent growth.
According to the PIOJ, this is attributable to expansion of banking activities and the increase in the Jamaica Stock Exchange Index.
Miscellaneous Services - 4.7 per cent growth This was due to increased tourism activity.
However, the Manufacturing Sector experienced an estimated decline of 5 per cent. This was explained by the following:
Food, Beverages and Tobacco was down by 9.7 per cent. This is partly explained by a fall in demand associated with higher prices.
The lower production levels of the Petroleum Industry.
The PIOJ also discussed the overall economic environment. Stated Dr. Hughes, "the increase in productive activity during the quarter took place against the background of relative stability in the foreign exchange market. The monthly average nominal rate depreciated by 0.7 per cent during the quarter and the real exchange rate appreciated by 3 per cent during the quarter.
Quarterly inflation rate was 4.6 per cent, but he calendar year to date inflation rate was 10.4 per cent." Dr. Hughes explained the caused for inflation during the quarter. "Inflation was due to the lagged effect of tax measures on food and drink, lagged effect of the depreciation in the exchange rate during the previous period, and the 40 per cent increase in bus fares in the Kingston Metropolitan Area in August." In the next quarter the PIOJ is projecting that:
Inflation is expected to decelerate relative to the previous two quarters, reflecting the impact of continued efforts by the monetary authorities to maintain price stability in the exchange rate market.
Real GDP for October - December 2003 is expected to increase by 1.8 per cent.
Growth is expected in all sectors, except for Manufacturing.
