Country Report Jamaica April 2009

Outlook for 2009-10

• A sharp recession in 2009 will hinder the government's efforts to reduce crime and poverty, as it is forced to cut spending in response to declining revenue.
• Jamaica's massive public debt burden will inhibit any further fiscal expansion. The fiscal deficit will widen, as sharply weakening economic activity constrains revenue growth and debt-servicing costs rise.
• The recession will deepen in 2009, as household consumption declines and a severe global downturn curbs export demand. After contracting by 3.8% in 2009, real GDP growth will rise by just 0.8% in 2010.
• Inflation will fall to single digits in 2009, as import prices and consumer demand weaken, but will return to over 11% in 2010, as the economy begins torecover.
• The current-account deficit will remain large in the forecast period, but will narrow in 2009, as import spending contracts owing to falling private consumption.

Monthly review

• The Jamaica Labour Party (JLP) won a resounding victory in the West Portland by-election on March 23rd, pointing to the party's continued popularity.
• The Economist Intelligence Unit's 2008 democracy index ranks Jamaica 49th out of 167 countries, putting it among the 50 countries considered "flawed democracies".
• The government received bids for the publicly owned Sugar Company of Jamaica (SCJ), after a deal with the Brazilian firm Infinity Bio-Energy fell through in January.
• Alumina Partners of Jamaica (ALPART) has announced that it will suspend operations for at least one year, beginning May 15th. Total alumina cuts will amount to an estimated 2.1m tonnes in 2009.
• After losing 21% of its value between October and February, the exchange rate's depreciating trend decelerated in March.
• Tourist arrivals remained resilient in the first quarter 2009. Strong growth in arrivals from Canada has shielded Jamaica from the worst of the downturn in the market.
• Remittance inflows fell by 18.3% and net remittances fell by 13.8% year on year in February, compared with declines of 10% and 7% respectively in January.

This report covers the following industry codes:
SIC Code: 70
NAICS Code: 72