PIOJ Growth-Inducement Strategy - Planning Institute of Jamaica

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The Foreign Exchange Market 17 At the end of December 2010, the average nominal exchange rate was $85.86 per US$1.00, representing a nominal appreciation of 4.2 per cent compared with the end of December 2009. This performance for 2010 contrasts with an 11.3 per cent nominal depreciation recorded during 2009. 18 Most of the appreciation observed during 2010 occurred in the April-June quarter when the Jamaican currency appreciated by 4.1 per cent. Marginal appreciation was recorded for the first and fourth quarters of the year as the July-September quarter registered a 0.3 per cent depreciation. The market displayed relative stability during the third quarter of 2010, in spite of demand pressures due to a decline in net private capital inflows and reduced foreign exchange supplies from tourism during the month of September. The performance in the foreign exchange market during 2010 was influenced primarily by general improvements in Jamaica’s macroeconomic conditions. Following the success of the Jamaica Debt Exchange initiative and the signing of a Stand-by Arrangement (SBA) with the International Monetary Fund (IMF), market conditions improved. Investor confidence improved as a result of these two initiatives and was further strengthened by the subsequent passing of end of March, June and September IMF quantitative targets. Investors showed increased willingness to hold Jamaican denominated instruments due to a favourable inflation outlook and increased confidence. Throughout the year, foreign exchange supply was supplemented by: (i) higher remittance inflows 19 ; (ii) increased inflows from the International Development Partners; (iii) reduction of the foreign currency reserve ratio by the BOJ during the first quarter of 2010 which led to the immediate release of US$30.0 million; (iv) higher tourist receipts. On the demand side, the continued decline in aggregate demand resulted in weak demand for foreign currency which further influenced the appreciation of the dollar. 3.0 Sectoral Performance 3.1 January - September 2010 The economy contracted by 1.3 per cent for the first nine months of 2010 with the Goods Producing and Services Industries declining by 1.9 per cent and 1.5 per cent, respectively. The decline in real GDP was attributable to: the lagged impact of the global economic crisis; drought conditions which impacted some industries in the first and second quarters of 2010; reduced operations at Air Jamaica given the airline’s sale to Caribbean Airlines; 17 This section is being assessed up to September 2010. 18 The depreciation recorded in 2009 reflected the impact of the economic downturn which resulted in a fall-off in supply reductions in remittance inflows and mining and quarrying receipts, and increased demand pressures due to market uncertainty. 19 For the January to November 2010 period net remittance inflows were US$1,713.0 million, a 6.4 per cent increase compared with the corresponding period of 2009. 61
negative impact of the Jamaica Debt Exchange Programme on net interest income of financial institutions; security operations in sections of Kingston and St. Catherine in May 2010; the passage of Tropical Storm Nicole in September 2010. The industries that registered the largest declines during this nine-month period were Mining & Quarrying; Finance & Insurance Services; Electricity & Water Supply; and Manufacture. Table 5.8. Change of Value-Added by Industry at Constant (2003) Prices Industry FY Jan- Mar Apr- Jun Jul- Sept Jan- Sept Oct-Dec Jan-Dec 2009/10 2010 2010 2010 2010 2010 2010 Preliminary Official Estimates Estimates Goods Producing Industry -8.4 -3.9 -2.2 0.7 -1.9 -0.5 -1.5 Agriculture, Forestry & Fishing 12.9 6.6 -3.2 5.2 2.9 -5.0 0.9 Mining & Quarrying -54.7 -40.7 3.7 29.3 -10.3 20.2 -3.5 Manufacture -4.2 -0.6 -2.6 -3.5 -2.2 -2.7 -2.3 of which: Food, Beverages & Tobacco -3.5 -2.0 -1.7 -0.5 -1.5 -1.0 -1.4 Other Manufacturing -5.0 1.6 -3.8 -7.0 -3.2 -4.5 -3.5 Construction -5.4 -2.1 -2.2 -3.9 -2.7 0.5 -1.9 Services Industry -0.4 -0.5 -2.1 -1.9 -1.5 -1.3 -1.4 Electricity & Water Supply 2.2 -1.2 -2.5 -5.8 -3.2 -7.7 -4.3 Transport, Storage & Communication -1.4 1.2 -3.1 -4.3 -2.1 -3.0 -2.3 Wholesale & Retail Trade; Repair and Installation of Machinery -2.2 -2.0 -2.2 -1.9 -2.0 -1.2 -1.8 Finance & Insurance Services 0.1 -3.7 -5.2 -4.2 -4.3 -3.0 -4.0 Real Estate, Renting & Business Activities -0.7 -0.7 -1.0 -1.2 -1.0 -1.0 -1.0 Producers of Government Services -0.3 -0.2 -0.1 0.0 -0.1 0.0 -0.1 Hotels and Restaurants 4.1 6.6 -1.1 2.4 2.7 4.5 3.1 Other Services 0.3 0.0 -1.1 0.6 -0.2 0.8 0.1 Less Financial Intermediation Services Indirectly Measured (FISIM) 0.2 -5.7 -5.8 -9.1 -6.9 -6.0 -6.7 Total GDP at basic prices -2.5 -1.1 -2.0 -0.9 -1.3 -0.8 -1.2 Source: STATIN & PIOJ Mining For January – September 2010, real value added for the Mining & Quarrying industry declined by 10.3 per cent relative to the corresponding period of 2009. This was due to a 20.4 per cent decline in alumina production as crude bauxite production increased by 62
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i A GROWTH-INDUCEMENT STRATEGY FOR
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To the many ordinary Jamaicans who
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Preface The Jamaican economy has ex
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for making a determined start on th
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the private sector groups, listed b
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Citibank N.A. Jamaica Branch Grace
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need for “additional fiscal space
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Chapter 2 ________________ Summary
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1.0 The Economic Situation Today 1.
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expected to provide an essential an
Page 21 and 22: Table 2.1. The Policy Framework: A
Page 23 and 24: programme of social inclusion that
Page 25 and 26: Strategic Focus Table 2.2. Growth S
Page 27 and 28: 6.0 Short-Term Growth Stimulus 6.1
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Page 31 and 32: Table 2A.2. NWA Projects To be Fast
Page 33 and 34: Table 2A.5. Community Renewal Proje
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Page 37 and 38: Appendix 2C Methodology of the Grow
Page 39 and 40: Part I _________ Overview 28
Page 41 and 42: 2.0 Vision 2030 Jamaica Before delv
Page 43 and 44: 3.0 May 2010 Security Event and Aft
Page 45 and 46: the longer than anticipated global
Page 47 and 48: April July October January April Ju
Page 49 and 50: Three industries recorded increases
Page 51 and 52: 9.0 Proposals for Growth-Stimulus I
Page 53 and 54: targeted economic and social infras
Page 55 and 56: partnering with government to disco
Page 57 and 58: 3.0 Growth Inducement Strategy The
Page 59 and 60: Growth-Inducement Strategy Alignmen
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Page 63 and 64: inadequate provision of public infr
Page 65 and 66: 2.0 Macroeconomic Assessment 2.1 In
Page 67 and 68: Increased global oil consumption wa
Page 69 and 70: $4,742.0 million and $688.4 million
Page 71: Non -Traditional Domestic Exports E
Page 75 and 76: ethanol and paint, whereas lower de
Page 77 and 78: Analysis of preliminary GCT data re
Page 79 and 80: The number of ship calls to the isl
Page 81 and 82: industry was, however, estimated to
Page 83 and 84: 4.0 Projected Performance 4.1 Calen
Page 85 and 86: increased marketing and extension s
Page 87 and 88: Electricity & Water For FY 2010/11,
Page 89 and 90: J$ Million Figure 5.1. Private Sect
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Page 95 and 96: creates allocative inefficiencies,
Page 97 and 98: Million $ Per cent Jun-10 Mar-10 De
Page 99 and 100: Table 6.1. Employed Labour Force by
Page 101 and 102: J$ million Mar-10 Dec-09 Sep-09 Jun
Page 103 and 104: FIGURE 7: GROSS NATIONAL SAVINGS RA
Page 105 and 106: 4.10.2. However, the extent of the
Page 107 and 108: Part III ____________ Analytical Fr
Page 109 and 110: functional relationship between the
Page 111 and 112: It follows that: (5) s = I/Y = [S -
Page 113 and 114: However, the existence of measureme
Page 115 and 116: (d) v* = Y*/K* This is a measure of
Page 117 and 118: in Chapter 8. The mutual interactio
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Page 121 and 122: Appendix 7A A Methodological Note T
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Chapter 8 ____________________ Asse
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The DBI focuses more narrowly on qu
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to ask, is it possible to predict g
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can be made to serve a very useful
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For further elaboration of the cons
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progressive Jamaica-based firms and
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Table 8.2. Jamaica: Doing Business,
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Table 8.4. Global Competitiveness I
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Table 8.5 (continued) Rank Indicato
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Rank* Constraint Table 8.7 Business
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Chapter 9 ___________________ Inter
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3.0 The Burdens of LAC’s Logistic
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conditions. These combined with a p
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Figure 9.4. Proportion of Primary A
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6.0 Logistics are Essential for Tou
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7.0 Fundamental Steps Forward for J
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Part IV ________________ Policies a
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Current Status: Cabinet by decision
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e more than compensated for by the
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B ____________________ Eliminating
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Commercial Bank loan rates have als
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5.0 Expected Outcomes These measure
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capital, mainly in the form of equi
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oth local and overseas (including t
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Table C.1. Proposed Implementation
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Locally, the Scientific Research Co
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Develop formal and informal links t
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D ____________________ Business Pro
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5.0 Recommendations Based on the ma
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2.5 Coexistent with the levels of u
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industry as well as provide funding
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Table E.2. Unemployed Labour Force
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indirect losses experienced when th
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Table F.1 (continued) Area Type of
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G ____________________ Community Re
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Figure G.1 Community Renewal Progra
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Table G.1 Priority Initiatives Obje
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Table G.2 Phased Implementation Pla
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H ____________________ Proposed Wes
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3.0 Transparency Guarantees By desi
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and Coordinating Unit (PCMU) was es
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therefore need to have sanctioned o
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Figure I.1. Functions of National P
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The rationalisation was guided by t
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deliver services in an efficient an
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efurbishing to allow for accommodat
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Part V _______________ Panelists’
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With the benefit of hindsight, some
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ight. Where we as a society fail is
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and exclusion of the majority of th
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the elders, youth, children. What f
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C __________________ Enhancing Nati
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Figure C.1. National resilience is
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