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

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71 The construction sector will increase its rate of growth (2.2percent and 3.4percent in the pre and post Ivan scenarios) propelled by on-going reconstruction activities. The expected growth of real estate and business services will decline from 1.5percent to 0.6 percent as a result of the damage sustained by the housing sector. Finally the tourism sector will record a one percentage decline from the rate of growth expected without taking into account the disaster (7percent and 6percent in the pre ad post Ivan scenarios) due to the temporary closure of some of the hotels affected by the hurricane. It is expected nonetheless that the tourism will fully recover before the end of the year to take advantage of the high season and that the visitor arrival flows will return to their previous trend. Thus far employers have not opted for cutting employment and in some cases are using their workers for relief and reconstruction activities (i.e., picking-up of debris). 3.2 Prices, wages and employment The rate of inflation will rise due to a decline in the supply of foodstuff consequent upon the effect of the event on agricultural output. On a point-to-point basis the rate of inflation will increase from 10percent to a range comprised between 11percent and 12percent. The rate of inflation will not be significantly affected in so far as the overall monetary and exchange rate conditions of the economy remain stable. Temporary increases in unemployment will occur in some of the affected activities that are labor intensive. In the previous section it was mentioned that the banana sub-sector will sustain 8 000 temporary job losses. 3.3 The evolution of the external sector The current account deficit will expand from 10percent to 11percent of GDP in the pre and post Ivan scenarios) (See Table III.4). The current account imbalance will be more than compensated by the surplus in the capital and financial account. The projected level of reserves in the pre-Ivan scenario will not be affected in any significant way by the impact of the Hurricane. It is expected that due to the effects of the event on mining and agriculture, merchandise exports will decline. At the same time merchandise imports responding mainly to the reconstruction needs and to the necessity of replacing lost output will rise. As a result the merchandise balance will widen its gap from 28percent to 30percent of GDP with and without taking into account the effects of the Hurricane. The services balance will reduce its expected surplus reflecting the effect of the Hurricane on stop-over arrivals. The estimated decline in the expected surplus for 2004 will be of the order of –6percent. In spite of the effects of the Hurricane, the services surplus will increase by 3percent in relation to 2003. The majority of hotel 71
72 accommodations will recover and be operational close to the end of the year and as result the effect of the event on the services balance will be felt in 2004. Table III.4 Balance of payments 2003-2004 Prior and post Hurricane Ivan Millions of USD Pre-Ivan Post-Ivan 2003 2004 2004 1. Current Account -765.1 -722.4 -757.2 A. Goods Balance -1942.6 -1992.4 -2103.3 Exports (f.o.b) 1385.6 1588.7 1540.5 Imports (f.o.b) 3328.2 3581.1 3643.8 B. Services Balance 559.8 605.7 576.1 Transportation -143.6 -140.8 -156.0 Travel 1102.7 1176.0 1159.0 Other Services -399.2 -429.3 -427.0 C. Income -571.4 -651.0 -631.9 Compensation of 70.7 86.3 86.3 employees Investment Income -642.1 -737.3 -718.2 D. Current Transfers 1189.1 1315.2 1401.8 General Government 105.2 102.8 108.0 Other Sectors 1083.9 1212.4 1293.9 2. Capital & Financial 765.1 722.4 757.2 Account A. Capital Account 0.1 1.6 1.6 Capital Transfers -0.3 1.6 1.6 General 0.1 0.1 0.1 Government Other Sectors -0.4 1.5 1.5 B. Financial Account 765 720.8 752.3 Direct Investment … … … Portfolio Investment … … … Other official -363.8 501.9 600.0 investment Other private 696.7 724.2 724.2 Investment Reserves 432.1 Source: On the basis of information provided by the Bank of Jamaica The negative result on the income account will decline as affected firms may decide to slowdown their profit repatriation flows to finance recovery and reconstruction 72
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JAMAICA Macro-Socio-Economic and En
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I. INTRODUCTION The Meteorological
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Significant storm surges also impac
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Table 2: Comparison of Highest One-
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the total population or some 369 68
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unable to make the most of the stre
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The housing stock is relatively stu
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damage. Eight of the parishes had 3
Page 21 and 22: Table 2-6 Damage and losses sustain
Page 23 and 24: Table 2-9 Damage and Losses Sustain
Page 25 and 26: 8,000 persons will be out of work f
Page 27 and 28: It is estimated that the coffee pro
Page 29 and 30: each the processing plants and dome
Page 31 and 32: 4. Commerce sector The Food, Bevera
Page 33 and 34: electricity generation rose in the
Page 35 and 36: critical facilities. The high sedim
Page 37 and 38: National Works Agency (NWA) and by
Page 39 and 40: 3. Telecommunications The Telecommu
Page 41 and 42: Erosion within the coastal zone of
Page 43 and 44: Portland Cottage experienced the mo
Page 45 and 46: Table 5-2 Summary of damages to the
Page 47 and 48: TABLE 5-1: Recovery Time and Cost E
Page 49 and 50: VI. SUMMARY OF OVERALL DAMAGE AND L
Page 51 and 52: 50 Based on the above information i
Page 53 and 54: 52 VII. MACROECONOMIC EFFECTS OF TH
Page 55 and 56: 54 2. Economic policy a) Fiscal pol
Page 57 and 58: 56 The performance of Agriculture (
Page 59 and 60: 58 bond loan, which caused a reduct
Page 61 and 62: 60 The performance of Manufacturing
Page 63 and 64: 62 Part of the wage-controlled grow
Page 65 and 66: 64 3.2 Prices, wages and employment
Page 67 and 68: 66 However the two most important i
Page 69 and 70: 68 likely as it stands the increase
Page 71: 70 also have an impact on employmen
Page 75 and 76: 74 The rehabilitation programme foc
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