Jamaica continues to record marginal economic growth
How is the economy?
JAMAICA HAS recently recorded two quarters of consecutive economic growth, indicating that local production of goods and services are improving slightly.
The Net International Reserves is approximately $1.3 billion, the highest it has been for some time now, as Jamaica's terms of trade improve. While the exchange rate continues to depreciate, reaching another all-time high of $110.61 to US$1 as of the end of trading day on Monday. Inflation for last year remained on target, and average commercial banks lending rate is a little below 15 per cent as of March 2014.
How is the labour market?
The unemployment rate has fallen from 16.2 per cent last year to 13.4 per cent this year. According to a recent survey by Statistical Institute of Jamaica (STATIN), 21,500 more people are employed this year, relative to last year. The unemployment rates for both men and women have improved, increasing by 0.5 and 1.7 percentage points respectively. The employment conditions improved even though more men and women entered the labour force. Unemployment among young people, age 14 to 24, also fell from 36.5 to 33.3 per cent. Unemployment among young men stands at 27.6 per cent compared to 41.1 per cent for females.
Where are the new jobs concentrated?
Nine thousand two hundred new clerks were hired between last year and this year, an increase of 9.2 per cent. Employed agricultural and fisheries workers increased by 4.2 per cent. The number of employed services workers and shop and market sales workers declined, relative to last year, 5,100 people or 2.1 per cent less are employed when compared to last year.
Employment in real estate, renting and business activities increased by 13.8 per cent over the same period. Wholesale and retail repair of motor vehicle and equipment increased by three per cent.
What about trade?
STATIN's recently released trade data show that Jamaica's imports and exports, this year, are less than they were last year. Imports in January, this year, are 20.8 per cent less than imports in January last year, while exports are 25.3 per cent less over the same period of time. The United States of America remains Jamaica's major trading partner; it accounts for 37.3 per cent of Jamaica's total imports and 49.7 per cent of total exports. The major commodities to record a decrease in imports are mineral fuels, food, chemicals and manufacturing goods. The importation of food declined by 13.4 per cent and accounted for 18 per cent of the total import bill.
How are exports doing?
Exports of some traditional domestic goods, including coffee and citrus, decreased from last year to this year; coffee exports declined by 36.9 per cent in January compared to January last year, citrus declined by 3.9 per cent, while pimento export increased by 3.9 per cent for the same period. Mining and quarrying fell by 3.3 per cent due to lower earnings from bauxite and alumina. Manufacturing fell by 23.1 per cent over the same period. Non-traditional exports also fell, export of non-traditional food, in particular, fell by 8.6 per cent.
What about regional trade?
Intra-regional trade in the Caribbean Community (CARICOM) is among the lowest, compared to other economic unions around the world. Notwithstanding this, trade has been improving between Jamaica and its regional trading partners. Total imports from CARICOM countries increased by more than nine per cent, while total exports to CARICOM countries increased as well, by 11.8 per cent, over the same period.
What is the current situation?
The economy is showing signs of recovery in certain aspects. However, the overall situation is far from where we would like it to be. A vast majority are unhappy with the country's marginal progress and believes more can be done by both the public and private sectors to accelerate Jamaica's rate of growth and improve the overall standard of living of the people.
National discussions on economic issues have become pervasive, which is a good sign. More people are beginning to understand economics better, and how the actions of each individual contribute to the macro economy. All efforts now should be geared towards improving economic and social conditions.
Jamaica continues to face efficiency problems in how the Government collects taxes, although this is a global problem. As recent as last week, the Prime Minister of the UK, David Cameron has been having discussions on how to improve their tax collection. The Government is not business-minded; as a result, it has not been able to invest or establish revenue earners that will generate meaningful return, which will enable them to ease the tax burden on the people of the country. A fundamental change in thought and approach is imminent.
Dr Andre Haughton is a lecturer in the Department of Economics on the Mona campus of the University of the West Indies. Follow him on twitter @DrAndreHaughton; or email firstname.lastname@example.org.