Jamaica: Macro-Socio-Economic and Environmental Assessment of ...

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The performance of Agriculture (-7 percent and 5 percent in 2002 and 2003 respectively) is
accounted for by domestic agriculture as export agriculture declined (14 percent and –6
percent respectively). This was in response to an improvement in climatic conditions and
government relief assistance to farmers affected by the flood rains.
The growth of the Mining sector (3.3 percent and 4.8 percent in 2002 and 2003
respectively) reflected an increase in capacity utilization of alumina plants in JAMALCO
and ALPART and higher prices due to favourable external demand conditions.
Manufacturing output contracted as in the previous year (-0.8 percent and –1.0 percent in
2002 and 2003 respectively). This was due to declines in the two major manufacturing
components beverage, food and tobacco and other manufacturing (-0.6 percent and –1.5
percent, respectively). The behaviour of the former responded to the reduction in sugarcane
milled, to the effects of the increase in the tax base, which affected dairy products; and
delays in the timely provision of raw material inputs. The evolution of other manufacturing
reflected the closure of the refinery plant for repairs and maintenance in the third quarter of
the year. For its part textile and apparel continued to exhibit a marked lack of
competitiveness.
The rate of growth in the Construction sector fell below that registered in the previous year
(2.3 percent and 1.1 percent in 2002 and 2003, respectively) and benefited from the
expansion and improvement of on-going infrastructure projects including the Highway
2000, the Northern Coastal Highway and the increase in capital expenditures by the utilities
companies.
The Tourism sector provided the most important impetus to overall economic growth (-0.4
percent and 6 percent in 2002 and 2003 respectively). The performance of this sector
capitalised on higher investment levels, efforts to diversify tourism products and a greater
number of cruise ship calls. The number of visitor arrivals, mainly cruise ship tourists, and
visitor expenditure expanded y 17 percent and 8 percent, respectively.
b) Prices, wages and employment
The rate of inflation reached double digits (7.3 percent and 14.1 percent on a point-to-point
basis in 2002 and 2003, respectively) for the first time in six years. The determining factors
included the depreciation of the nominal exchange rate, the tax measures implemented
between May and June, higher international oil prices, increases in transport costs and the
increase in the minimum wage.
The decomposition of the price level into its different components shows that the largest
contributor to inflation was the food and drink and transportation categories (48 percent and
13 percent of the total) followed by fuels and other components and housing expenses (9
percent for both).
During 2003 the government proceeded to settle wage claims to weekly and daily paid
public employees and to education officers.
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