Sun | Nov 18, 2018

Economic trajectory positive, says Shaw - Finance minister calls first quarter of no growth an anomaly

Published:Thursday | October 19, 2017 | 12:00 AMPaul Clarke
Audley Shaw, minister of finance and the public service, drinks from a coconut, while looking on are Dennis Chung (right), CEO of the Private Sector Organisation of Jamaica; Lyttleton ‘Tanny’ Shirley (centre), chairman of Factories Corporation of Jamaica (FCJ); and Dr Donald Farquharson (left), managing director of FCJ, at the opening ceremony of the inaugural FCJ Business and Wellness Expo at Garmex Freezone and Industrial Estate, Marcus Garvey Drive, in Kingston, yesterday.

Finance Minister Audley Shaw says that Jamaica's economic outlook remains positive and that the assessment of negative growth for the first quarter of the fiscal year, as noted by the International Monetary Fund (IMF) Head of Mission Dr Uma Ramakrishnan recently, was an anomaly based on dated information.

"I heard the interview, and you must bear in mind that that's dated information, which came out of the 2015 Survey of Living Conditions. We certainly are hoping that 2016 will show improvement, and, certainly, so, too, for 2017," Shaw said during yesterday's ceremony for Factories Corporation of Jamaica Business and Wellness Expo at the Garmex Freezone and Industrial Estate in Kingston.

Citing the recent record job numbers of 35,000, Shaw said that it was proof that the economy was on the right trajectory, adding that it would be prudent when analysing economic data, to take the overall picture into account.


Unemployment rate down


Recent data also showed that the unemployment rate fell from 14 per cent to about 12.2 per cent.

"You can't judge anything by the one quarter. You have to judge it by the overall picture of what is happening in the economy, and the fact is that it continues to be positive. That negative growth was an anomaly in the overall economic trajectory for Jamaica," stressed Shaw.

"The IMF made reference to what would be the negative growth in the June quarter, and that, of course, has to be ascribed to the combination of two major events. You had droughts in the first quarter, which affected the second quarter in terms of the calendar year; and then, of course, you had the flood conditions in the first quarter of the fiscal year (the second quarter of the calendar year)," he said.

The agriculture and mining sectors, two major industries that recorded no growth in the June quarter, are showing signs, that they are in line to rebound in the third quarter, Shaw said, as favourable conditions continue to persist.

... Method of measuring growth no longer ideal - Minister

Finance Minister Audley Shaw said that the way economic growth is measured in Jamaica is no longer ideal as the process is outdated when compared to more advanced nations.

"The way that STATIN is measuring right now, they are using a base year of 1998. The developed world is using a base year of 2008. A 10-year difference and the base year relate to how you measure the economy," he said.

"So that has to be reviewed as well because there can be no question in anybody's mind that things are picking up. There is buoyancy out there. Jobs are being created. If anything, one of the challenges we are going to face, and we have to deal with it right away, is the human employment and resource training programme, which has to step up its game to make this work," said Shaw.