Economic growth slowing, says PIOJ

The Jamaican economy is projected to slow to 0.7 per cent growth for the remainder of the current fiscal year, Planning Institute of Jamaica (PIOJ) boss Dr Wayne Henry has revealed.

Henry was non-committal when he was asked by one lawmaker on Wednesday whether poverty is on the decline.

The economy grew by one per cent over the April-June quarter.

However, Henry told members of the Public Administration and Appropriations Committee (PAAC) of Parliament that by the end of the current fiscal year, this will slow to 0.7 per cent.

This is down from the 1.5 per cent target that was set when the Budget was passed in March, he acknowledged.

The PIOJ boss blamed the slowdown on the impending closure of the JISCO-Alpart refinery and the impact of the drought conditions experienced earlier in the quarter.

He was quickly challenged by chairman of the PAAC Dr Wykeham McNeill with a 2016 report by the agency that predicted growth rates of two per cent for the 2016-17 financial year, 2.9 per cent for 2017-18, and 3.3 per cent for 2018-19.

“What is it that has happened in the last four years that has made us change our projections from hoping to get 3.3 per cent and aspiring to five per cent to settling for 0.7 per cent?” McNeill asked.

NEGATIVE SHOCKS

Henry explained that the economy had experienced what he described as “negative shocks” and cited as an example the climate-change phenomenon that has caused periods of prolonged drought and periods of excess rainfall.

“The mining sector has had significant downtime because of the same adverse weather ... . In terms of roads and the need to repair, and even construction, activities have been put on halt because of adverse weather,” he said, explaining that the agriculture sector was also impacted.

“We give forecasts based on what we would expect to happen. We always, as you know, give the context of what we call the upside potential for growth, as well as downside risks,” he added.

But following reports that the rate of poverty increased to 19.3 per cent in 2017, government member of the PAAC Alando Terrelonge wanted an update.

POVERTY DECLINING?

“In your professional opinion, Dr Henry, as at 2019, would you say that poverty is on the decrease in Jamaica?” Terrelonge asked.

“A lot of the attendant conditions that we see – increasing employment, greater levels of macro-economic stability, increase value-add in terms of persons with certification (persons employed with vocation and certification) – there is that basis that we can say we are cautiously optimistic,” the PIOJ boss replied.

“We are expecting things to continue to improve because a lot of things are happening because a lot of work is being done. Our expectation is that as we continue to be focused on building resilience – both climate and economic-social resilience – you will see positive outcomes.”

The PAAC was examining the First Supplementary Estimates, which were tabled in the House of Representatives by Finance Minister Dr Nigel Clarke last week and showed that the Budget had increased by $50 billion.