Business

PIOJ says economy progressing towards Vison 2030 goals

BY BALFORD HENRY
Senior staff reporter
balfordh@jamaicaobserver.com

Friday, June 16, 2017

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During 2016, the Jamaican economy continued to make progress towards realising the goals of the Vision 2030 Jamaica – National Development Plan and the Medium Term Socio-economic Policy Framework (MTF) 2015-2018.

This was confirmed in the 2016 Economic and Social Survey of Jamaica (ESSJ) book, which contains close to 400 pages of information of the country's economic and social performance during the calendar year, published by the Planning Institute of Jamaica (PIOJ) and tabled in Parliament on Tuesday.

In the introduction to the book, director general of the PIOJ, Dr Wayne Henry, pointed out that economic growth and job creation were the main areas of focus of the government during the period.

He noted that the economy grew by 1.4 per cent for 2016, which represented the fourth -consecutive year of growth, “as the country continues to benefit from structural reforms that have begun to bear fruit”.

“The macroeconomic indicators for the calendar year showed a 1.7 per cent inflation outturn, the lowest in over 50 years; a better than programmed fiscal deficit of $23.5 billion for April – December, 2016, compared with $24.9 billion in the corresponding period of 2015; and a primary surplus of $76.8 billion for April – December 2016, relative to $66.0 billion in the corresponding period of 2015,” Dr Henry pointed out.

He noted that rating agency Moody's upgraded the government's bond rating and ratings on bonds issued by government-related entities. And, additionally, Jamaica's business and consumer confidence indices remained buoyant throughout the year, the highest since 2001.

Dr Henry said that the country attained a new milestone with respect to labour force performance.

“During 2016, the average employed labour force grew by 36,375 persons to 1,175,150 relative to 2015, and marked the fifth-consecutive year of increase, and the highest level in Jamaica's history, surpassing the previous peak in 2008.

“This increase is consistent with the improvement in Jamaica's consumer and business confidence levels, which continue to be underpinned by improvement in the macroeconomic environment and has resulted in increased economic activity,” Dr Henry said.

He pointed out that The Labour Force Survey, undertaken by the Statistical Institute of Jamaica (STATIN), indicated that the average unemployment rate for 2016 was 13.2 per cent, which was 0.3 percentage points lower than the average for 2015.

The Average Female Unemployment Rate stood at 17.4 per cent (down 0.5 percentage points), and the Average Male Unemployment Rate was 9.6 per cent (down 0.3 percentage points) compared with 2015.

The Average Youth Unemployment Rate fell 1.0 percentage point to 31.8 per cent.

The ESSJ noted, in its “Overview” that this progress resulted in Jamaica's improvement by five places in the country's ranking in the Human Development Index. The country, in recording its fourth -consecutive year of economic growth, achieved its strongest growth since 2011, which was supported by greater stability in the macroeconomy and business environment.

In addition to achieving the lowest rate of inflation in five decades and a record level of employment, the debt-to-GDP ratio stood at 122.5 per cent at the end of 2016, compared with 126.1 per cent at the end of 2015.

Jamaica's per capita GDP, expressed in United States dollars was US$5,134.251 in 2016, an improvement compared with US$5,114.23 recorded for 2015.

The survey added that Jamaica's macroeconomic programme for the first nine months of 2016 was underpinned by the strategies and targets in the Memorandum of Economic and Financial Policies (MEFP) of the Extended Fund Facility (EFF) agreement with the International Monetary Fund (IMF), which ended last year.

The programme remained on track, with Jamaica satisfying all the quantitative targets and structural benchmarks outlined for this period.

This facilitated the disbursement of approximately US$80 million for the combined 11th and 12th reviews and US$39.6 million for the 13th review. This also brought total disbursement under the EFF to approximately US$787.8 million. With a new government in place since February 2016, and a renewed emphasis on achieving a more robust economic growth outturn, the Government requested a Stand-By Agreement (SBA) with the IMF to support the continued economic reform agenda and foster greater levels of economic growth and employment.

Consequently, in November, the Executive Board of the IMF approved a 3-year precautionary SBA for Jamaica, while simultaneously cancelling the macroeconomic programme supported under the EFF.

This new programme, which amounts to US$1.64 billion or 312.0 per cent of Jamaica's quota in the IMF, focuses on supporting macroeconomic stability and job creation.

With the new SBA arrangement in place, real value -added growth of 1.4 per cent was recorded for 2016, representing the strongest growth outturn in five years.

This performance was driven by improvements in both the goods producing and services Industries. Growth was facilitated by favourable weather conditions, which spurred growth in agriculture, food processing as well as water production; and by the roll-out of several strategic growth projects in the areas of energy, Logistics, business process outsourcing, hotel expansion and other infrastructure developments.

The World Bank Doing Business 2017 report ranked Jamaica 67th out of 190 countries, which was two places lower than in 2015. However, in the subcategory, Paying Taxes, Jamaica improved by 39 places to rank 116.

Jamaica also improved its ranking in the Trading Across borders category, moving up two places to 131.

With respect to Starting a Business, Jamaica remained as the best-ranked country in Latin America and the Caribbean, despite falling six places to 12th position.

The Global Competitiveness Report 2017, which assessed the competitiveness landscape during 2016, ranked Jamaica in 75th position of 138 countries, an improvement by 11 places relative to the 2015 ranking. Jamaica also attained its highest competitiveness score of 4.13 points out of a possible seven points.

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