Thu | Aug 22, 2019

#JamaicaUnderLabour | Growth rate stronger than official data suggesting - Jackson

Published:Tuesday | March 13, 2018 | 12:00 AMPaul Clarke/Gleaner Writer

A mix of continued strong tourism numbers, the lowering of Jamaica Public Service electricity rates through its renewable energy mix, and above-average bauxite production at Alpart could result in the Jamaican economy realising annual growth rates of between four and five per cent, according to financial analyst John Jackson.

He noted, however, that he was of the view that the method used to measure the economy was flawed and outdated, as it did not do a good job of capturing all pertinent data on which to extrapolate the correct growth numbers.

Jackson was presenting his views at The Gleaner's 'Jamaica Under Labour Forum' last week Thursday, which sought to grade the Andrew Holness administration on key areas since it took over the reins of political power from Portia Simpson Miller in 2016.


Key objective of Government


Holness had trumpeted five per cent annual economic growth in four years as one of the key objectives of his Government. Among other detractors, the Opposition PNP said that the target was unrealistic, as Jamaica had grown an anaemic one per cent or less annually in GDP for the last four decades.

Under pressure to deliver the growth target, Holness relented, saying five-in-four was meant to be aspirational and not pragmatic. But Jackson believes it is possible if all the stars are ligned.

"I don't know if it will grow (five in four); it's possible it can happen, but there are some factors. Mainly, I, for one, think that the methods used to measure the economy are flawed," Jackson said.

"I believe that the growth rate is actually stronger than what the official data is suggesting," he reasoned.

He said that employment numbers suggested that the overall growth numbers are closer to three per cent than to the reported one per cent at the end of the last financial year.

Five-in-four target attainable - analysts

President of the Jamaica Employers' Federation, David Wan, agrees that the much-talked-about five-in-four economic growth target was reachable with more than a 50-50 chance.

"I have to quote the politician: 'It is really an aspirational target.' It may or may not happen, but I think we have to focus on one step at a time this year, next year, the following year," he said.

"I think it has a 50-50 chance of happening. For the first time in 25 years, the monetary and fiscal policies are in control; previously one of them was out of whack. So, there's a good chance that bank lending rates will come down even further," Wan reasoned.


Growth not shared


Meanwhile, Professor Trevor Munroe, executive director National Integrity Action (NIA), pointed out that Jamaica has grown at six to eight per cent for a decade, but the country imploded because growth was not shared. He warned that a similar result could derail the long-term attempts for sustainable economic growth.

"Let's not deceive ourselves that the growth rate alone will deal with the social instability," said Munroe.

Allison Peart, Ernst & young country manager, said: "What I like about the five-in-four is that it is aspirational, an ideal and something to work for, and because of that reason I beleive it is possible.

"I like the fact that it gives us a focus, and if you set a target and you fall a little below, at least you are focused on it. So for me, it's not so much if we will get there. I hope we will, because for all of us, it's a good thing," said Peart.