Finance Minister Dr. Nigel Clarke says the continued shift in the level of contraction in the economy represents a good sign of the path to recovery.
Clarke is reacting to economic data put out by the Statistical Institute of Jamaica (STATIN) which has indicated that for the last quarter of 2020, the economy contracted by 8.3 percent when compared to the similar quarter in 2019.
It is an improvement over the previous two quarters of 2020.
In June, the economy contracted by 18.4 percent and in September, the contraction was measured at 10.6 percent.
The continued contraction of the economy, according to STATIN, is due mainly to an 11.1 percent decline in the services industry.
The hotels and restaurants sector got the biggest hit, declining by 53.8 percent.
It was also indicated that the mining sector broke five consecutive quarters of double-digit declines with a 6.3 percent growth being recorded for the industry.
Growth was also recorded in construction, which moved up by 6.3 percent.
Meanwhile, preliminary estimates showed that the gross value added declined by 9.9 percent for the calendar year 2020.
This reduction occurred after seven consecutive years of growth and largely reflects the impact of COVID-19 on the Jamaican economy, according to STATIN.
Nevertheless, Clarke said the improvements seen in some sectors are good news from the economy.
“The other good news is that construction grew by 6.3 percent for the quarter, having grown by seven percent the quarter before. As is evident with the naked eye, construction is booming even in the pandemic,” he told The Gleaner.
Meanwhile, STATIN also reported that the All-Jamaica Consumer Price Index (CPI) declined by 0.1 percent for February 2021.
It was also indicated that the inflation rate recorded a decline.
Up to February, the calendar year-to-date inflation rate was -0.1 percent, while the fiscal year-to-date inflation rate (April 2020 – February 2021) was 3.3 percent
It was indicated that the decline in the inflation rate was mainly attributed to a fall of 1.3 percent in the index for the heaviest weighted division ‘Food and Non-Alcoholic Beverages.
Clarke argued that assertions that food prices were increasing upwards of 150 percent since 2016 are an exaggeration.
Citing data from the Consumer Affairs Commission, he stated that the price of tin mackerel had increased by 34 percent since 2016.
And cooking oil increased by 16 percent since 2016, he said, citing data from the agency.
Increases of 1.4 percent in the index for the ‘Housing, Water, and Electricity and the ‘Gas and Other Fuels’ divisions and a 0.5 percent improvement in the index for the ‘Transport division’ tempered the decline in the CPI.
New tariff changes for the Jamaica Public Service Company, approved by the Office of Utilities Regulation, resulted in an increase in the price of electricity.