Ja­maica to con­tinue grow­ing faster than T&T

Jamaica Gleaner - - BUSINESS - Steven Jackson Se­nior Busi­ness Re­porter steven.jackson@glean­erjm.com

ALTHOUGH GROWTH in Ja­maica’s na­tional out­put has been anaemic, and un­der­per­forms oth­ers in the re­gion, the tourism-de­pen­dent econ­omy is ex­pected to do bet­ter than trad­ing part­ner Trinidad & Tobago, an oil and gas pro­ducer.

In fact, Ja­maica will grow at the fourth slow­est rate next year in a faster-grow­ing Caribbean, ac­cord­ing to Oc­to­ber re­vi­sions by the Eco­nomic Com­mis­sion for Latin Amer­ica and the Caribbean (ECLAC).

The re­gional United Na­tions body projects 1.2 per cent ex­pan­sion of Ja­maica’s na­tional out­put, or GDP, this year, to be fol­lowed by a mar­ginal uptick of 1.3 per cent growth in 2017. The pace for 2017 is slower than most of the 15 Caribbean ter­ri­to­ries on ECLAC’s mon­i­tor­ing list, but faster than Trinidad & Tobago, Ba­hamas and Do­minica dur­ing 2017.

Trinidad is pro­jected to con­tract by 2.5 this year, but ex­pe­ri­ence a turn­around in 2017 to grow by an es­ti­mated 0.8 per cent. The twin-is­land repub­lic's for­tunes have lagged with the sus­tained fall-off in world oil prices from highs above US$100 per bar­rel to around US$50 per bar­rel to­day.

“In the English and Dutch-speak­ing Caribbean, av­er­age growth is es­ti­mated at 1.4 per cent for 2017, con­trast­ing pos­i­tively with the con­trac­tion of 0.3 per cent ex­pected for 2016,” said ECLAC.

The ter­ri­to­ries that are pro­jected to lead growth in the Caribbean in 2017 are the Do­mini­can Repub­lic at 6.3 per cent, fol­lowed by St Kitts and Ne­vis at 3.0 per cent, and An­tigua and Bar­buda at 3.0 per cent.

BET­TER PRO­DUC­TIV­ITY NEEDED

Ac­cord­ing to ECLAC, stronger in­vest­ment and bet­ter pro­duc­tiv­ity are needed in or­der to main­tain a sus­tained growth path and sup­port the higher growth rates pro­jected for 2017.

“Here, in­vest­ment in in­fra­struc­ture and tech­no­log­i­cal in­no­va­tion must play a key role,” said the UN body, while not­ing that so­cial poli­cies should re­main in a frame­work of smart fis­cal ad­just­ments.

“Ef­forts are needed to en­sure the sus­tain­abil­ity of the re­gion’s public fi­nances, with poli­cies that con­sider both the im­pact on long-term growth ca­pac­ity and the so­cial con­di­tions of the re­gion’s pop­u­la­tion,” ECLAC said. In this July 21, 2016 photo, Trinidad of Tobago Prime Min­is­ter Dr Keith Row­ley ad­dresses a me­dia con­fer­ence while Ja­maica’s Prime Min­is­ter An­drew Hol­ness looks on, dur­ing an of­fi­cial visit by Row­ley to Ja­maica.

The pro­jec­tions for 2017 re­flect ex­pec­ta­tions of more aus­pi­cious global con­di­tions than in 2015 and 2016, ac­cord­ing to ECLAC.

Last week, ECLAC re­vised its eco­nomic growth pro­jec­tions for the wider Latin Amer­ica and the Caribbean re­gion (LAC) for 2016 and now ex­pects an av­er­age con­trac­tion in GDP of 0.9 per cent this year, weighed down by Venezuela.

Eco­nomic ac­tiv­ity is ex­pected to pick up in 2017 with av­er­age growth of 1.5 per cent in the LAC re­gion, ac­cord­ing to the UN agency.

The Do­mini­can Repub­lic will not only grow the fastest in the Caribbean but also the fastest in Latin Amer­ica, beat­ing Panama, which usu­ally leads the pack. Venezuela, on the other hand, is pro­jected to de­cline by 8.0 per cent in 2016 and 4.0 per cent in 2017.

As in 2016, growth in 2017 will show marked dif­fer­ences between coun­tries and sub­re­gions, ECLAC re­ports. The economies

of South Amer­ica, which spe­cialise in pri­mary goods – par­tic­u­larly oil, min­er­als and foods – will post av­er­age growth of 1.1 per cent in 2017, con­trast­ing with an es­ti­mated de­cline of 2.2 per cent in 2016.

The economies of Cen­tral Amer­ica are ex­pected to reg­is­ter growth of 4.0 per cent in 2017, above the 3.7 per cent pro­jected for 2016. For Cen­tral Amer­ica plus Mex­ico, the pro­jec­tions are 2.5 per cent for 2016 and 2.6 per cent for 2017.

In view of the cur­rent eco­nomic down­turn, ECLAC again af­firmed that the re­gion needs pro­gres­sive struc­tural change with a drive for de­vel­op­ment based on equal­ity and en­vi­ron­men­tal sus­tain­abil­ity.

Public and pri­vate in­vest­ment poli­cies need to be co­or­di­nated across dif­fer­ent ar­eas to re­shape pat­terns of pro­duc­tion, con­sump­tion and en­ergy, based on learn­ing and in­no­va­tion, the agency said.

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