The Jamaican economy is expected to contract during this quarter due to the impact of Hurricane Sandy. Central Bank Governor, Brian Wynter, told the bank’s quarterly briefing on Wednesday that this would result in economic output in the December quarter contracting between point seven and minus 1.7 per cent.
The Bank of Jamaica (BOJ) Governor said the negative outlook has been influenced by preliminary estimates of the damage caused by the Hurricane on both the Jamaican economy and the East Coast of the United States.
“The domestic impact of Hurricane Sandy is substantial, as there has been a sharp decline in projections for activity in agriculture forestry and fishing. The impact on mining and quarrying would be also registering a sharper decline than we originally expected due to the closure of the bauxite plants,” said Wynter.
Meanwhile, there was even more negative news for the economy, as central bank estimates suggest that performance of the economy in the September quarter continued to reflect the impact of weak domestic demand, as well as slower growth in the global economy.
The only industry which recorded growth in the September quarter was hotel and restaurants. Finance Minister Dr Peter Phillips, had said the negotiating team expects to finalise a medium-term economic programme with the IMF by the end of December. The deal is important to restore confidence in the Jamaican market with international and local creditors, investors, as well as multi-lateral agencies.
With just over a month to go before the Government’s projected date for signing an agreement with the International Monetary Fund, (IMF), Wynter did not comment on when the deal will be inked. But said he was hopeful based on the level of negotiations so far, that an agreement was near.
“I believe that it is important that we have an IMF agreement at the earliest possible time, meaning soon, soon. We are working very hard to make that possible but you just have to go back and read what the Minister said and what the Prime Minister has said to understand that those comments remain relevant, pertinent and that’s not going to change.”
He also said the central bank’s monetary policy rate was unchanged for the September quarter at 6.25 per cent, largely because of uncertainties in the external and domestic economic environment. The BOJ Governor said the negative expectations stemmed from anxieties about the period of negotiation with the IMF and the declining Net International Reser
