Country Report Jamaica January 2009

Outlook for 2009-10

• The governing Jamaica Labour Party (JLP) will be under pressure to produce results on its anti-crime platform. The issue is likely to dog the JLP to the same extent that it troubled its predecessor.
• Boosting GDP growth is a major policy goal, but will prove difficult as the global economy slows. 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. Expenditure will increase as the government implements its economic stimulus plan and interest costs rise.
• Recessionary conditions will persist in 2009 as household consumption declines and recession in the developed world curbs export demand. The Economist Intelligence Unit expects only a modest recovery in 2010.
• Inflation will fall to single digits in 2009, as import prices and consumer demand weaken, but will remain stubbornly high.
• 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 prime minister, Bruce Golding, has threatened to call a general election if a JLP member is successfully unseated in a looming court case.
• The government announced an economic stimulus plan, intended to generate revenue, lower taxes and extend fresh loans to local business. The economic stimulus plan offers tepid relief to the already sagging Jamaican economy.
• The government expects multilateral lenders to disburse US$1.05bn in loans to Jamaica by March 2009. The government presumes that the inflows will cushion any fall-out from the decline in private lending.
• The fiscal deficit for April-November is J$1bn worse than budgeted. Capital expenditure has been cut to accommodate major shortfalls in the tax take following a trend begun in August.
• A series of job cuts were announced, raising concerns over the impact of the recession on Jamaica's unemployment rate. The tourism sectora major employer--faces a sharp decline in visitor arrivals in early 2009..
• Falling global metals prices have prompted a large alumina producer to announce sharp production cuts in 2009; this will have a negative impact on export volumes.

Source: Country Report

This report covers the following industry codes:
SIC Code: 10;70
NAICS Code: 212;72

This report covers the following industry codes:
SIC Code: 10;70
NAICS Code: 212;72