Business leaders predict growth in new fiscal year
Business sector leaders are optimistic that Jamaica can rebound from the economic fallout sparked by the COVID-19 pandemic to record growth in the next fiscal year.
The new fiscal year, 2021/22, commences on April 1.
The leaders' positivity is based on key provisions in the government’s $830.8-billion budget for the upcoming fiscal year and developments with the COVID-19 vaccination roll out in Jamaica, its main trading partners and tourism source markets, such as the United States of America (USA).
They contend that these can provide the requisite impetus to kick-start economic recovery and propel the country towards achieving projected growth targets.
Four per cent growth anticipated
According to the government’s 2021/22 Fiscal Policy Paper, the economy is projected to grow by an average 4.1 per cent between 2021/22 and 2024/25, after declining by as much as 14.6 per cent during the first half of 2020/21, from April to September 2020.
The document indicates that 5.2 per cent growth is expected for 2021/22, as the demand for goods and services increases over 2020/21 levels.
It further points out that Jamaica’s recovery is predicated on the anticipated decreasing economic impact of COVID-19, as global vaccinations against the disease are undertaken.
President of the Jamaica Employers Federation (JEF), David Wan, says he anticipates a “definite increase” in economic activity by the end of 2021/22, particularly in tourism, “when a lot of Americans and Britons… and Jamaicans… would have been vaccinated”, thereby allaying health concerns relating to the pandemic and spurring increased international travel and heightened activity in the hospitality industry.
“Tourism is of particular interest to me, because if activities in that sector do not return to pre-COVID levels, and go beyond the out-turns recorded at that time, then I think we could experience challenges in kick-starting economic recovery,” Wan told JIS News.
He emphasises that public education will be critical in ensuring that locals understand the importance of the government’s COVID-19 vaccination programme, and its implications for Jamaica’s economic resuscitation.
Wan also cited several key provisions in the budget, which he describes as “well-crafted”, as being pivotal to driving economic recovery.
Among these, he noted, are the decision not to introduce new taxes in the upcoming year; the proposed one-off $33-billion withdrawal from the Bank of Jamaica (BOJ) to provide additional budgetary funding support; Development Bank of Jamaica (DBJ) financing for small entrepreneurs, the reduction in customs administration fees to small exporters from $3,000 to $500; and additional social interventions for persons impacted by COVID-19.
The JEF President pointed out that these are “positives” that bode well for Jamaica’s recovery from the ravages of the pandemic.
Wans said that in presenting the budget, Minister of Finance and the Public Service, Dr. Nigel Clarke, “covered all of the areas that we were hoping would get some attention."
“Given everything happening around us, I think that, based on these, it is quite feasible for [the economy] to perform well in the upcoming fiscal year, and for the growth that we are all looking for to materialise,” he added.
Jamaica could recover faster than expected
President of the JMEA, Richard Pandohie, said based on the extent of COVID-19 vaccination programmes in the USA and other key markets, “I actually see Jamaica recovering faster than anticipated."
He said the vaccination efforts will serve to boost consumer confidence rapidly in those countries, resulting in persons opting to travel.
“Players in the tourism sector are saying that they are seeing very exciting booking rates for as early as June this year,” Pandohie said.
He said despite the economy contracting by an estimated 10.2 per cent for the 2020 calendar year, according to the Planning Institute of Jamaica (PIOJ), the country is “well-positioned” to at least achieve the levels of growth anticipated based on the vaccination programme and the government’s “solid” budget.
He is hopeful that the economic turnaround will be “a lot sharper than projected."
Small Business Association of Jamaica (SBAJ) President, Michael Leckie, said while he does not anticipate the projected levels of growth to materialise in the near-term, he is, nonetheless, optimistic that encouraging signs of economic recovery will begin to emerge during 2021/22.
He foresees the vaccination effort and budgetary provisions for the micro and small business stakeholders, in particular, fuelling a gradual increase in economic activities.
“What we expect, insofar as the vaccination programme is concerned, is that as it is rolled out and persons are inoculated, more individuals will be inclined to go out and shop, thereby contributing to increased commerce activities,” Leckie said.
He added that with the government channelling substantial resources into the small business sector, “we are going to see a positive reaction to this."
“Based on the feedback from the SBAJ’s membership… programmed engagements relating to the budget and vaccination exercise should have a positive multiplier effect throughout the economy,” Leckie said.
Meanwhile, business analyst, Warren McDonald, said he anticipates a “small” level of growth to materialise during the latter part of 2021/22.
He noted that the budget is geared towards recovery of the economy, “based on limited resources."
Additionally, McDonald said the vaccination of persons against COVID-19 “is a priority area that will enable the [targeted] recovery to take place."
“Overall, I believe we should [see] some growth, beginning in 2021/22. Maybe not as much as the four per cent projected or anticipated… but something positive. I think real meaningful growth should begin to materialise in the following year [2022/23],” he told the JIS.
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