Director General of the Planning Institute of Jamaica (PIOJ) Dr Wayne Henry has indicated that at this stage it is unlikely Jamaica will experience an economic recession in the short term, barring any unforeseen shocks.

He addressed the matter on Tuesday, March 3, during the PIOJ’s quarterly hybrid media briefing, where he provided preliminary estimates on the economy’s performance for the October to December 2025 period.

The PIOJ is reporting an estimated 7.5 per cent decline in economic performance for the October to December 2025 quarter, compared with the corresponding period in 2024.

Additionally, the projection for January to March 2026 is for a contraction in output within the range of four per cent to six per cent. For fiscal year 2025/26, the economy is expected to contract within the range of one per cent to two per cent.

“Preliminary data indicate that the Jamaican economy contracted, largely reflecting the negative impact of the damage and loss sustained as a result of Hurricane Melissa on productive activities.

“With Jamaica recording a significant year-on-year decline in the October to December 2025 quarter and expectation for a further year-on-year contraction in the January to March 2026 quarter, there are concerns regarding the possibility of an economic recession affecting Jamaica in the short term,” Dr Henry said

Providing clarity on the issue, the Director General explained that a recession is defined as a contraction in the business cycle, marked by a significant slowdown in economic activity.

“Generally, as a rule of thumb, it is considered that two consecutive quarters of a quarter-on-quarter decline in a country’s seasonally adjusted real GDP (gross domestic product) represent a recession. Seasonally adjusted GDP estimates it removes recurring patterns, such as weather changes or holidays that affect economic activity, making it easier to observe underlying GDP growth trends across consecutive quarters.

“Looking at the seasonal adjusted quarter-on-quarter GDP performance for Jamaica, the most widely used indicator for determining a recession, it shows that growth was recorded in the first three quarters of 2025, according to official data from STATIN (Statistical Institute of Jamaica). In light of the devastation caused by Hurricane Melissa in the fourth quarter of 2025 and the preliminary estimates presented today, the official figures are expected to reflect a contraction in the October to December 2025 quarter,” Dr Henry said.

He pointed out that for the first condition of a recession to be met, a further decline would need to be recorded in the January to March 2026 quarter compared with October to December 2025.

“However, given the strength of the recovery, to date, it is unlikely that the output level for the January to March 2026 quarter will fall below the level recorded in October to December 2025; that is, we are projecting quarter-over-quarter growth in January to March 2026 relative to October to December 2025,” Dr Henry stated.