By Ashford W. Meikle, Staff ReporterTHE COUNTRY'S economy was almost blown off target by Hurricane Ivan but is poised for a rebound. So said Director General of the Planning Institute of Jamaica (PIOJ), Dr. Wesley Hughes.
Dr. Hughes was speaking at the quarterly press briefing of the state agency yesterday at the PIOJ's New Kingston office. "The overall assessment of the damage is $36.8 billion," he said. According to Dr. Hughes, the damage caused by the hurricane had a negative impact on the country's GDP performance for the third quarter. "For July to September 2004 real GDP grew by an estimated 0.1 per cent relative to the corresponding period of 2003," said Dr. Hughes. He continued, "services went up by 0.6 per cent and goods production fell by 0.9 per cent."
Dr. Hughes remains optimistic, notwithstanding the 3.3 per cent inflation rate for October. "The macroeconomic environment continue to be generally stable," he emphasised. He pointed to post quarter results which show increased investments in tourism and the projected growth in the services sector.
Elaborating on the growth in the sectors, the director general said: "Manufacturing and construction and installation [in the goods producing segment] grew by 2.0 per cent and 3.7 per cent, respectively."
SERVICES SECTOR GROWTH
The services sector experienced growth in practically every category except water and electricity. The utilities were "significantly affected by Hurricane Ivan," said Dr. Hughes in explaining the decline in utilities production. He noted that the sector's growth was driven by the "distributive trade (1.5 per cent), miscellaneous services (up 1.9 per cent) and real estate and business services (up 1.7 per cent.)"
"Prior to [Ivan] there was a general momentum carried over from the first half of the year previously the economy was growing by 2.6 per cent," said Dr. Hughes. "But the third quarter was significantly affected by the occurrence of Hurricane Ivan."
So far, the country has recorded a year to date growth rate of almost two per cent.
However, the statistically insignificant 0.1 per cent growth contrasts with an inflation rate of 2.9 per cent during the quarter. And the fiscal deficit ballooned to $6.9 billion, $3.5 billion more than budgeted for. Dr. Hughes attributed the increased debt to "revenue being $3.4 billion less than budgeted and expenditure was $0.1 [billion] more than budgeted."
