PIOJ Growth-Inducement Strategy - Planning Institute of Jamaica

were modelled as an increase in Government consumption demand for social and
community development services.
DBJ funding for MSMEs was modelled as an increase in investment channelled to
the sectors indicated by the DBJ as accounting for the composition of approved
but undisbursed funding.
1.4 There are several caveats to bear in mind:
(1) The I-O based estimate of GDP impact captures mainly the impact of the
construction phase of the infrastructure-related projects. It is to be noted
that after construction, these infrastructure projects would be expected to
have additional productivity-enhancing effects due to increase in the
quantity and quality of the stock of public infrastructure. This is especially
true for the RADA farm-road projects.
(2) While the I-O model is closed with respect to the household sector,
thereby capturing important secondary effects through induced household
consumption spending, the I-O framework still may not capture all the
induced demand spill-overs.
(3) The GDP impact relates to the first year impact of these programmess,
assuming a given production structure and inter-industry relationships.
Permanent effects on growth would necessitate the implementation of
other policy interventions which reinforce the credibility and sustainability
of the overall economic programme.
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