A GROWTH-INDUCEMENT STRATEGY FOR JAMAICA IN THE SHORT AND MEDIUM TERM

further study, is not included in the impact analysis, but must be considered to augment
the projected growth-impact reported here.
7.0 Impact Analysis of Short-Term Growth Stimulus
7.1 The overall projected growth-impacts of the proposed short-term growth
measures are summarized in Tables 2.4 and 2.5 below. Appendix 2B presents details of
the projected employment and/or regional impacts. The methodology of the impact
analysis is described in Appendix 2C.
Table 2.4 One-year Growth Impact of Short-term Growth-Strategy Components
Projects
Expenditure a
(J$ million)
Additional One-year Growth
(% Change in GDP at constant prices)
Lower bound Upper bound
NWA - Priority Level 1 (PL 1) b 3,292.66 0.34 0.72
NWA - Priority Level 2 (PL2) c
5,703.76 0.59 1.24
RADA Farm Roads 3,883.00 0.46 0.85
Enhanced CRP (various agencies) 1,277.00 0.16 0.27
DBJ Micro Loans 250.00 0.03 0.05
Total 14,406.42 1.58 3.13
a For NWA and RADA projects, the expenditures do not necessarily reflect the total project costs but rather
the component of final demand expenditure accounted for in the projection period.
b NWA-PL1 projects are those projects which have been targeted for implementation in FY2011/12, but
for which the fiscal space was uncertain.
c NWA-PL2 projects are those projects that were initially targeted for implementation after FY 2011/12.
The accelerated implementation of these projects is being recommended.
Source: Compiled by the PIOJ
6.2 Overall, the aggressive front-loading and implementation of the specified shortterm
growth projects could increase real GDP growth by 1.6 - 3.1 percentage points
above a baseline projection (by PIOJ) of 2.1% for 2011. 2 This implies that instead of a
projected 2.1% real GDP growth in 2011, these projects could induce increased real
growth to between 3.7% and 5.2%. This boost in growth would come from a total
expenditure of J$14.4 billion, amounting to about 1% of current GDP.
6.3 The improvement in growth performance would also have positive benefits for
poverty reduction and social inclusion. Under the baseline scenario of 2.1% real growth,
the poverty rate in 2011 is projected to be in the range of 16.5% -18.1%, representing a
2 This baseline projection is subject to further review by PIOJ on the basis of incoming data on current
economic performance.
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