Thu | Aug 17, 2017

Jamaica to continue growing faster than Trinidad

Published:Wednesday | October 19, 2016 | 10:00 AMSteven Jackson
In this July 21, 2016 photo, the Prime Minister of Trinidad of Tobago Dr Keith Rowley addresses a media conference at Jamaica while Jamaica's Prime Minister andrew Holness looks on at left, during an official visit by Rowley to Jamaica.

Although growth in Jamaica's national output has been anaemic, and underperforms others in the region, the tourism-dependent economy is expected to do better than trading partner Trinidad & Tobago, an oil and gas producer.

In fact, Jamaica will grow at the fourth slowest rate next year in a faster-growing Caribbean, according to October revisions by the Economic Commission for Latin America and the Caribbean (ECLAC).

The regional United Nations body projects 1.2 per cent expansion of Jamaica's national output, or GDP, this year, to be followed by a marginal uptick of 1.3 per cent growth in 2017. The pace for 2017 is slower than most of the 15 Caribbean territories on ECLAC's monitoring list, but faster than Trinidad & Tobago, Bahamas and Dominica during 2017.

Trinidad is projected to contract by 2.5 this year, but experience a turnaround in 2017 to grow by an estimated 0.8 per cent. The twin-island republic's fortunes have lagged with the sustained fall-off in world oil prices from highs above US$100 per barrel to around US$50 per barrel today.

"In the English and Dutch-speaking Caribbean, average growth is estimated at 1.4 per cent for 2017, contrasting positively with the contraction of 0.3 per cent expected for 2016," said ECLAC.

The territories that are projected to lead growth in the Caribbean in 2017 are the Dominican Republic at 6.3 per cent, followed by St Kitts and Nevis at 3.0 per cent, and Antigua and Barbuda at 3.0 per cent.

BETTER PRODUCTIVITY NEEDED

According to ECLAC, stronger investment and better productivity are needed in order to maintain a sustained growth path and support the higher growth rates projected for 2017.

"Here, investment in infrastructure and technological innovation must play a key role," said the UN body, while noting that social policies should remain in a framework of smart fiscal adjustments.

"Efforts are needed to ensure the sustainability of the region's public finances, with policies that consider both the impact on long-term growth capacity and the social conditions of the region's population," ECLAC said.

The projections for 2017 reflect expectations of more auspicious global conditions than in 2015 and 2016, according to ECLAC.

Last week, ECLAC revised its economic growth projections for the wider Latin America and the Caribbean region (LAC) for 2016 and now expects an average contraction in GDP of 0.9 per cent this year, weighed down by Venezuela.

Economic activity is expected to pick up in 2017 with average growth of 1.5 per cent in the LAC region, according to the UN agency.

The Dominican Republic will not only grow the fastest in the Caribbean but also the fastest in Latin America, beating Panama, which usually leads the pack. Venezuela, on the other hand, is projected to decline by 8.0 per cent in 2016 and 4.0 per cent in 2017.

As in 2016, growth in 2017 will show marked differences between countries and subregions, ECLAC reports. The economies of South America, which specialise in primary goods - particularly oil, minerals and foods - will post average growth of 1.1 per cent in 2017, contrasting with an estimated decline of 2.2 per cent in 2016.

The economies of Central America are expected to register growth of 4.0 per cent in 2017, above the 3.7 per cent projected for 2016. For Central America plus Mexico, the projections are 2.5 per cent for 2016 and 2.6 per cent for 2017.

In view of the current economic downturn, ECLAC again affirmed that the region needs progressive structural change with a drive for development based on equality and environmental sustainability.

Public and private investment policies need to be coordinated across different areas to reshape patterns of production, consumption and energy, based on learning and innovation, the agency said.

steven.jackson@gleanerjm.com