Nicholas Richards, Gleaner Writer
HUGHES
JAMAICA'S ECONOMY shrank slightly during the April to June quarter of this year, according to the Planning Institute of Jamaica (PIOJ).
At the same time, government has spent less than $1.5 billion lower than projected for the April to June quarter, although revenue has been $0.7 billion less than budgeted. The sum effect is that the administration is ahead in meeting its balanced budget target.
Bad weather conditions were responsible for the 0.2 per cent decline in the country's Gross Domestic Product (GDP), a measurement of economic performance, the PIOJ's quarterly review of the economy reported.
HARDEST HIT SECTORS
The hardest hit sector was agriculture and the related areas of forestry and fishing which had a 19 per cent drop in output during the period.
''The residual impact of Hurricane Ivan in September of last year is the major cause of the decline," explained Dr. Wesley Hughes, director-general of the PIOJ. "In addition, we had a very severe drought condition leading up to June this year".
Crop production fell by 15.3 per cent; agricultural export production fell by nearly a third. But the bad weather did not undercut livestock production, which went up by almost four per cent.
The manufacturing sector declined by less than two per cent - the hardest hit being the food, beverage and tobacco category where production declined by nearly three per cent.
The mining and quarrying sector grew by 0.1 per cent. Alumina production increased by 1.4 per cent, but bauxite output fell by 14.5 per cent.
But Dr. Hughes told journalists at the PIOJ headquarters in New Kingston yesterday that, "If your agriculture is down that significantly and your manufacturing is down ,then the overall impact, despite all the creditable performance from the other sectors, is not likely to give you any significant growth''.
The PIOJ is projecting that the economy will grow 1.9 per cent in the July to September quarter. Government's growth target for the year 2005/2006 is 3.6 per cent.
Regarding inflation or the average rate of price increases, the PIOJ reported a 5.7 per cent movement during the quarter, due to the higher energy and world food prices compared with the previous quarter.
Latest information from the Statistical Institute of Jamaica (STATIN) showed that inflation in the following month of July remained stubbornly high at 1.6 per cent. For the 12 months ending in July, prices rose 18.2 per cent on average or or nearly seven percentage points above the level for the previous 12 months.
