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

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3. Evolution of main variables
3.1 Economic activity
For 2004 the economy was forecasted to expand by 2.7 percent fuelled by the continuing
dynamism of mining, tourism and to a lesser extent manufacturing. The agricultural sector
was expected to witness a downward trend already visible during the first two quarters of
the year (-1 percent and –2 percent growth for the first and second quarters and –5 percent
for 2004). The performance of agriculture was expected to respond to adverse climatic
conditions, the effects of Hurricane Charley, which hit two of the parishes accounting for
close to half of the crop production, and to the reduction in planting activities.
The Mining sector was forecasted to continue the expansion of the previous year (10
percent) on the basis of favourable external conditions (in particular higher aluminium
prices), expansion in productive capacity and its higher rate of utilization.
The Manufacturing sector was projected to increase by 4percent .due to the increase in the
demand for its products and improved productivity as well as higher levels of output in
some of the main sub sectors within the manufacturing industry.
The Construction sector was projected to maintain a moderate rate of growth (2percent).
The activity of the sector was expected to respond mainly to on-going government
infrastructure projects.
The sectors Electricity and Water, and Transportation, Storage and Communications were
expected to grow in line with the expansion of the economy (2 percent and 2.6 percent
respectively) notwithstanding the rise in the international price of oil. The growth dynamics
of the former was expected to respond in particular to the performance of the Mining
sector, which is highly energy intensive. The performance of the latter would be positively
affected by the spill over effects of the Tourism sector.
Tourism activities were projected to rise in accordance with the expected upward trend in
visitor stop-over arrivals and expenditures (10percent with respect to 2003). Cruise ship
arrivals, which account for a small part of visitor expenditures, were expected to grow at a
very moderate rate. Prior to Hurricane Ivan, the industry registered a temporary decline in
its activity due to Hurricane Charley. Tourism performance reflected the full recovery of
the industry following the effects of September 11 th and responded in greater part to the
favourable economic conditions in developed economies.
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