Tropical Storm Nicole - Planning Institute of Jamaica

domestic market, business and consumer confidence was boosted by the successful signing of a 27-
month Stand-By Agreement between Jamaica and the International Monetary Fund. These
developments facilitated:
the central bank’s removal from its list of Open Market Operation (OMO) Instruments, all tenors
above 30-days as at January 16, 2010; and
a reduction in interest rates. The market determined 182-day Treasury Bill yield fell to 9.26 per cent,
7.54 percentage points lower that at the start of the year. Through three moves, the BOJ reduced
the rate applicable to its 30-day OMO Instrument, by a combined total of 150 basis points to 9.0 per
cent.
3. Economic Activity
For the first half of 2010, real GDP declined by 1.5 per cent relatively to the corresponding period
of 2009, compared with the 3.6 per cent contraction recorded in January-June 2009. Economic
performance during 2010 was mainly influenced by the protracted effects of the global economic
crisis on the domestic economy. Aggregate demand remained weak as the unemployment levels
rose and purchasing power of individuals declined. In addition, the economy was also adversely
impacted by the effects of: (a) drought conditions which prevailed during the second half of 2009
and the first quarter of 2010; (b) security operations in Kingston and St. Catherine and the
associated ramifications during the second quarter of 2010; as well as (c) the JDX programme on
financial institutions.
The decline in the economy was reflected in both the Goods Producing and Services Industries
which fell by 3.2 per cent and 1.3 per cent, respectively. All Goods Producing Industries declined
with the exception of Agriculture, Forestry & Fishing which grew by 1.9 per cent. Within the
Services Industry, the Finance & Insurance Services, Wholesale & Retail Trade Repairs and
Installation of Machinery and Electricity & Water industries recorded the largest declines of 4.5 per
cent, 2.1 per cent and 1.8 per cent, respectively. The Hotel and Restaurants industry, the industry
which captures most of tourism’s direct contribution to Gross Domestic Product (GDP), grew by
2.9 per cent.
Real value added in the Agriculture industry grew by an estimated 1.9 per cent. Performance in the
first two quarters was affected by drought conditions which began in the latter half of 2009.
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