Jamaica is expected to continue experiencing a slowdown in economic growth over the next financial year, according to projections by the Bank of Jamaica (BOJ).
Among the reasons cited are downside risks regarding the extend of a fiscal consolidation package, aimed at reducing government deficit and debt accumulation, and which could be announced by Finance Minister Dr. Peter Phillips when he presents the budget.
“Upside risks to the growth forecast include the impact on growth and employment of major investment projects later in the fiscal year,” BOJ governor Brian Wynter said as he presented the quarterly monetary report in downtown Kingston Wednesday.
“However, the risks to the growth forecast at this time are largely to the downside. Primary among these is the uncertainty regarding the extent of the fiscal consolidation to be announced. Fiscal consolidation would result in reduced domestic demand in the near-term which could be exacerbated by weaker global growth and the impact of adverse weather,” Wynter said.
“However, the Bank is forecasting that, should the fiscal measures materialise, the adverse impact on growth will be temporary,” he added.
Economic output is projected to grow marginally in the range of 0.0 to 1.0 per cent for fiscal year 2012/13 compared with a forecast and result of 1.0 to 2.0 per cent expansion for financial year 2011/12 ended March 31.
The range of 0.0 to 1.0 per cent expansion in economic activity was also reflected in the last quarter of financial year 2011/12, and is also estimated for domestic output for the June 2012 quarter.