Hurricane Beryl blows July-Sept growth
Hurricane Beryl blows July-Sept growth . Hurricane Beryl blows July-Sept growth
The Jamaica Observer
HENRY... generally, the prospects are negative, due largely to the lingering effects of Hurricane Beryl on the economy, compounded by several other hydrological events, including Tropical Storm Rafael (Photo: JIS)

The passage of Hurricane Beryl earlier this year plundered economic gains for the country as gross domestic product (GDP) output is estimated to have declined by 2.8 per cent during the July to September quarter — reversing some 12 consecutive quarters of growth since the outbreak of the novel coronavirus pandemic.

The PIOJ, in its last report, had said that the expectation was for the economy to contract within the range of -0.1 per cent to -1.0 per cent.

PIOJ Director General Dr Wayne Henry, speaking at a quarterly briefing on Wednesday in which he released the preliminary estimates for GDP performance during the third quarter period, said that output from almost all sectors fell down as both goods-producing and services industries contracted by 6.5 per cent and 1.2 per cent, respectively.

The performance, which largely stemmed from the the adverse impact of Hurricane Beryl and other hydrological events, the director said, affected growth for a number of the country’s key industries.

“For agriculture and fisheries, domestic crop production was severely affected, with 13 of 14 parishes recording a decline in hectares reaped. The mining and quarry industry was also adversely affected, as the hurricane caused infrastructure damage to the Rocky Point port and this necessitated the diversion of alumina exports to an alternative port as well as tempered production. For the hotel and restaurants sector, the cancellation of flights and diversion of visitors to alternative destinations adversely affected the country,” he said as he outlined some of the effects during the briefing held Wednesday.

Additionally, he said, “Electricity and water was also affected as that industry experienced significant damage and loss as a result of the destruction to infrastructure assets caused by the hurricane. Sections of the island were negatively impacted by the delays in restoring electricity, which had implications for production across other industries. Transport, storage, and communication also became affected following the closure of Jamaica’s international airports and aerodromes and the consequential temporary cession of travel to the island and damage to telecommunication systems limited Internet and phone access.”

The passage of the powerful category four hurricane on July 3, which severely rattled sections of the island’s southern coast, outside of the macroeconomic impact, also left significant damage and loss estimated at $32.2 billion or 1.1 per cent of the country’s GDP.

“Damage and loss in the infrastructure sector accounted for almost 50 per cent of the total at $15.9 billion, led by damage to transport infrastructure at $10.3 billion, followed by damage to electricity infrastructure at $4.1 billion,” Henry noted.

Outside of the badly damaged agriculture sector, which contracted by 13.5 per cent and mining by 15.2 per cent, both manufacturing and construction from the goods producing industry also recorded downturns of two per cent and 2.8 per cent during the review period. Within the services industry, the usually dominant hotel and restaurant/tourism sector was also among several others to have contracted, decreasing 2.1 per cent after July-Sept visitor arrivals dipped 3.1 per cent to total 633,993.

Similarly, nine-month out-turns weighed by recurrent challenges saw the performance of real GDP decrease by 0.4 per cent for the Jan-September period.

The PIOJ director general, in forecasting a negative outlook for the local economy, said the projection is for the economy, during the remainder of this calendar and fiscal year, to further contract.

For the current October-December quarter it is projected that the change in real value added will be within the range of -1.5 per cent to 0.0 per cent and -1.0 per cent 0.0 per cent for the full calendar year (January-December 2024).

“Generally, the prospects are negative, due largely to the lingering effects of Hurricane Beryl on the economy, compounded by several other hydrological events, including Tropical Storm Rafael. Although the overall performance of the economy is projected to stabilise during the January-March 2025 quarter, with a flat performance projected, the agricultural industry is not expected to recover until the first half of financial year 2025/26,” Henry said.

Looking ahead, the expectation is for all industries, with the exception of agriculture; construction; hotels and restaurants; and other services, to record growth in the short term.

“The construction industry is anticipated to be impacted by the downturn in capital expenditure on infrastructure works, due to work stoppages associated with the hydrological events, and the resultant delays in the disbursement of funds. For the hotels and restaurants and other services industries, the continued impact of the travel advisories as well as industrial disputes, which impacted operations at some hotels, are also expected to temper the performance,” Henry further noted.

Underscoring the impact from these and other shocks which have hindered the country’s ability to realise sustained economic growth, the director general stressed the need for Government to re-examine and prioritise the plans and initiatives needed to address the challenges that have hindered the country’s ability to foster more robust and sustained growth.

“This is particularly important, given Jamaica’s legislated target of achieving a debt-to-GDP ratio of 60 per cent or less by FY2027/28,” he stated, while lauding the roll-out of the ASPIRE Jamaica programme by Prime Minister Andrew Holness this week as an important initiative that will help to engender higher levels of productivity as it focuses on generating more robust levels of inclusive growth.
Jamaica
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2024-11-21
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Hurricane Beryl blows July-Sept growth
Hurricane Beryl blows July-Sept growth