PIOJ Growth-Inducement Strategy - Planning Institute of Jamaica
PIOJ Growth-Inducement Strategy - Planning Institute of Jamaica
PIOJ Growth-Inducement Strategy - Planning Institute of Jamaica
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contraction in the first half <strong>of</strong> the fiscal year and a projected moderate increase in the<br />
second half <strong>of</strong> the fiscal year.<br />
During the first six months <strong>of</strong> FY2010/11, the economy contracted by 1.4 per cent with<br />
declines <strong>of</strong> 0.7 per cent for the Goods Producing and 2.0 per cent for the Services<br />
industry. Domestic demand remained weak due mainly to the prolonged adverse impact<br />
<strong>of</strong> the global economic crisis on the purchasing power <strong>of</strong> individuals. Economic activity<br />
was also constrained by: (i) the adverse impact <strong>of</strong> the <strong>Jamaica</strong> Debt Exchange<br />
programme on financial institutions; (ii) drought conditions which impacted some<br />
industries during April-June 2010; (iii) the negative effect <strong>of</strong> security operations in<br />
sections <strong>of</strong> Kingston and St. Catherine during May 2010; and (iv) the passage <strong>of</strong> Tropical<br />
Storm Nicole during the last week <strong>of</strong> September 2010.<br />
Marginal growth during the final six months <strong>of</strong> FY2010/11 will be influenced by the<br />
projected increase in real GDP for the January-March 2011 quarter as the economy is<br />
expected to contract during October –December 2010. The projected growth during<br />
January-March 2011 will represent the first quarterly increase since July-September<br />
2007. Most industries are expected to register higher value added during this final quarter<br />
<strong>of</strong> the fiscal year with the strongest expansion projected for the Mining & Quarrying<br />
industry.<br />
Manufacture<br />
For Fiscal Year 2010/2011, it is anticipated that real GDP for the Manufacture industry<br />
will decline by 2.4 per cent. This performance is predicated on declines in two main<br />
components <strong>of</strong> the industry – Food, Beverages & Tobacco (down 0.9 per cent) and Other<br />
Manufacturing (down 4.3 per cent) as it is expected that the supply and demand<br />
constraints affecting the industry are expected to persist for the last three months <strong>of</strong> FY<br />
2010/11 and as such will be unable to outweigh the declines anticipated for the first nine<br />
months <strong>of</strong> the fiscal year. Declines in the Food, Beverages & Tobacco and Other<br />
Manufacturing industries are expected to be tempered by the expansion <strong>of</strong> exports and<br />
the development <strong>of</strong> new products.<br />
Wholesale & Retail Trade; Repair and Installation <strong>of</strong> Machinery<br />
For Fiscal Year 2010/11, real value added for the Wholesale & Retail Trade industry is<br />
projected to decline by 1.2 per cent relative to the previous fiscal year. This decline is<br />
predicated on continued contractions in the domestic economic environment.<br />
Consequently, a reduction in total sales is anticipated, resulting from: (i) continued weak<br />
consumer demand for goods and services associated with reservations about future job<br />
prospects and increases in income; and (ii) a slowdown in domestic industries associated<br />
with WRTRIM, specifically the Construction and Manufacture industries and weak<br />
consumer demand. The out-turn <strong>of</strong> the industry is against the background <strong>of</strong> a weak but<br />
improving domestic macroeconomic conditions, as evidenced by: (i) increasing business<br />
confidence; (ii) expansions in loans and advances to the industry and for consumption<br />
purposes; and (iii) a higher level <strong>of</strong> remittances.<br />
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