Economy projected to grow by 1.6 per cent
The Jamaican economy is forecast to record a 1.6 per cent increase in real gross domestic product (GDP) for financial year 2015-2016.
According to the Growth Agenda Policy Paper, which was tabled in Parliament recently, the estimated GDP growth of 1.6 per cent is based on projected increases of 2.5 per cent and 1.2 per cent in the real value added of the goods-producing and services industries, respectively.
This baseline forecast is predicated on the combined effect of an uptick in global economic activities, which would augur well for Jamaican export industries; strengthened investor confidence, consequent on the continued robust implementation of the macroeconomic programme under the Extended Fund Facility; and favourable weather conditions, which would facilitate improved agricultural production.
In addition, the growth projection is based on the impact of business environment reforms and strategic investment projects and improved linkages within the domestic economy due, in part, to the depreciation of the Jamaican dollar.
For the goods-producing sector, growth is expected to be supported by improved performances of all industries. Increased output from the agriculture, forestry and fishing sector of five per cent will emanate mainly from increased capacity utilisation at agro-parks.
Real value added for the mining and quarrying industry is expected to increase by 4.5 per cent, due to the limited reopening of the Alpart plant as well as higher global industrial production and the associated increased demand for alumina and bauxite.
With regard to the construction sector, there is an anticipated rise of 1.4 per cent in real value added, due to continued road construction, particularly highways, new hotels construction as well as the programmed construction of several energy plants.
For the services sector, all industries with the exception of producers of government services are expected to record increases. The highest increases are expected for hotels and restaurants at 2.3 per cent; transport, storage and communications at two per cent and other services industries at two per cent.
According to the policy paper, the improved performance in the hotels and restaurant industry is expected to be boosted by increased visitor arrivals, consequent on continued marketing, particularly in new markets, and an increase in room stock.
Growth in the transport, storage and communications sector is predicated on an expansion in transport activities associated with a strengthening of trade, including a rise in exports of alumina and bauxite, combined with continued competition in the telecommunications sector.
Increased activity in the business processing outsourcing sector is the main driver of the 1.2 per cent growth estimated for the real estate, renting and business activities industry.