2.3% growth driven by rain­fall

– Byles

Jamaica Gleaner - - GROWTH & JOBS - McPherse Thomp­son As­sis­tant Editor – Busi­ness mcpherse.thomp­son@glean­erjm.com

THE ES­TI­MATED 2.3 per cent economic growth Ja­maica ex­pe­ri­enced in the quar­ter to Septem­ber 2016 has been largely at­trib­uted to in­creased rain­fall which is driv­ing agri­cul­ture, ac­cord­ing to co-chair­man of the Economic Pro­gramme Over­sight Com­mit­tee (EPOC), Richard Byles.

He said that in the last six quar­ters, the coun­try has had small but pos­i­tive growth which has been in­creas­ing each quar­ter.

Byles cau­tioned, how­ever, that “a lot of that growth is com­ing from rain­fall which is driv­ing agri­cul­ture,” a big com­po­nent in the coun­try’s gross do­mes­tic prod­uct (GDP), “com­pared to last year when we had drought and the year be­fore when we had drought”.

He said that while he was happy to see growth and to see it in­crease each quar­ter, “I am not com­pla­cent about it and know that a big part of it has to do with the bet­ter out­put of agri­cul­ture con­se­quent on rain­fall”.

LIKELY GROWTH RATES

Asked about the Economic Growth Coun­cil’s (EGC) tar­get of five per cent growth in four years, Byles sug­gested that based on the growth trend so far, with­out any­thing ex­tra­or­di­nary hap­pen­ing in the econ­omy, such as a hur­ri­cane or other nat­u­ral dis­as­ters, Ja­maica was likely to see growth rates of Richard Byles, co-chair of EPOC.

up to five per cent in six or seven years.

“What the EGC is try­ing to do is to tur­bocharge that by looking at those as­pects of the econ­omy and do­ing busi­ness which are re­stric­tive to fur­ther growth; and to that ex­tent, you have to com­mend their ef­forts. It’s a good thing, and I cer­tainly sup­port that ef­fort,” he said.

“We are a small econ­omy and if we do get a sig­nif­i­cant flow of for­eign in­vest­ments, it can spur our growth sig­nif­i­cantly. So, there is al­ways hope, and in any event, if we even fell short of five per cent in four years, the ef­fort that we are mak­ing to do that is well worth it. So, maybe we get four per cent in four years, great. Bet­ter than three per cent in four years or two and a half per cent in four years,” said the EPOC co-chair.

Ac­cord­ing to Byles, for­eign di­rect in­vest­ment in­flows in 2011-12, be­fore Ja­maica signed a four-year economic sup­port pro­gramme with the In­ter­na­tional Mone­tary Fund, stood at about US$303 mil­lion or about 2.1 per cent of GDP, which was “re­ally low and re­ally was a re­flec­tion of the state of the econ­omy at that time”.

In 2015-16, the Bank of Ja­maica es­ti­mated that for­eign di­rect in­vest­ment in­flows to Ja­maica was US$946.3 mil­lion or 6.6 per cent of GDP. “This is a good in­di­ca­tor of con­fi­dence in the econ­omy, when you see for­eign di­rect in­vest­ments rise like this,” he said.

Byles said the cen­tral bank also re­ported that credit to the pri­vate sec­tor for the 12 months to Septem­ber 2016 grew by 14.3 per cent. “When you com­pare that to one year ago, Septem­ber 2015, it was then 7.8 per cent, and if you took it back to June of 2015, it was 4.5 per cent,” said Byles.

“More and more credit is go­ing to the pri­vate sec­tor, shared be­tween re­tail pur­chases as well as busi­ness in­vest­ments, and is an­other good in­di­ca­tor of con­fi­dence in the econ­omy and the rein­vest­ment of the pri­vate sec­tor in the econ­omy,” he added.

CON­FI­DENCE IN ECON­OMY

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