PIOJ says economy to decline by up 13 per cent in December 2025 quarter

The Planning Institute of Jamaica (PIOJ) expects the Jamaican economy to contract by 11 to 13 per cent in the December 2025 quarter, the sharpest decline since the COVID-19 pandemic.

“It is unprecedented and far-reaching. It is expected to result in increased unemployment and weakening demand,” said PIOJ Director General Dr Wayne Henry during his quarterly briefing on Tuesday.

This marks the worst quarterly performance since April to June 2020, when the island was hit by the pandemic.

Henry noted that “the prospects are generally negative” for the October to December quarter, reflecting the impact of Hurricane Melissa.

He explained that the assessment considers damage to housing stock, the electricity grid, roadways, and the water supply network.

For the fiscal year ending March 2026, the economy is projected to decline between 3 and 6 per cent, though Henry stressed that the estimate may change as more information becomes available.

He pointed out that the seven hardest-hit parishes account for three-quarters of Jamaica’s agriculture and livestock output, and nearly 90 per cent of tourism infrastructure.

Before Hurricane Melissa struck on October 28, the economy had been poised for “strong growth” of 3.1 per cent, reflecting recovery from Hurricane Beryl in 2024 and Tropical Storm Rafael.

In fact, Gross Domestic Product (GDP) grew 4.6 per cent in the July to September 2025 quarter compared with the same period a year earlier.

“It largely reflected recovery from the similar period in 2024,” Henry said.

Growth was broad-based, with the goods-producing sector expanding by 10 per cent and services rising 3 per cent.

The rebound followed the devastation of Hurricane Beryl, which caused $56.7 billion in damage across agriculture, forestry, fishing, electricity, mining, and tourism.

From January to September 2025, GDP grew 2.4 per cent, driven by a 5 per cent increase in the goods sector and 1.6 per cent growth in services.

The unemployment rate stood at 3.3 per cent, among the lowest ever recorded.

Meanwhile, price rises are expected arising from Melissa.

The Bank of Jamaica (BOJ) announced Monday that inflation is expected to rise above its 4 to 6 per cent policy band due to the price impact of Hurricane Melissa.

Inflation is projected to return within the target range by 2027.

Current estimates place the damage from Hurricane Melissa at US$9 billion—twice the initial figure.

business@gleanerjm.com

Follow The Gleaner on X, formerly Twitter, and Instagram @JamaicaGleaner and on Facebook @GleanerJamaica. Send us a message on WhatsApp at 1-876-499-0169 or email us at onlinefeedback@gleanerjm.com or editors@gleanerjm.com.