The Jamaican economy has further declined in the third quarter, as the country plunges deeper into recession.

The economy plummeted by 10.7% in the third quarter of 2020, which represents the third straight quarter of economic decline for Jamaica. In the first quarter, the Jamaican economy shrank by 2.3% followed by a drop of 18% for the second quarter.

This means Jamaica has further pushed in recession mode. A recession is classically defined as two consecutive quarters of economic decline.

The Statistical Institute of Jamaica (STATIN) reports that largely, the island’s 10.7 per cent slump in the third quarter was due to declines in both the Services and Goods Producing Industries. The services sector went down by 13.1% while the decline in the goods-producing sector was more tempered at 3.5%.

STATIN, which is the official agency measuring the country’s economic performance blames the poor out-turn on the continued spread of the novel coronavirus (COVID-19) and the measures implemented to limit its spread. These measures have undoubtedly led to the economy’s underperformance.

Individual sector performance

All industries within the Services Industries declined with the exception of the Producers of Government Services, which grew by 0.1 per cent. Declines were recorded for: Electricity & Water Supply (7.0%), Wholesale & Retail Trade; Repairs; Installation of Machinery & Equipment (8.1%), Hotels & Restaurants (65.2%), Transport, Storage & Communication (14.8%), Finance & Insurance Services (5.6%), Real Estate, Renting & Business Activities (2.8%) and Other Services (27.0%).

STATIN reports,“The negative impact of COVID-19 and the measures implemented to limit its spread were felt more severely in the Hotels & Restaurants, Transport, Storage & Communication and Other Services industries. There was an 81.8 per cent decline in stopover arrivals to the island and there were no cruise passenger arrivals for the period under review.”

Within the Goods Producing Industries, the Manufacturing and Mining & Quarrying industries declined by 10.9 per cent and 20.7 per cent respectively. However, higher levels of output were achieved in Agriculture, Forestry & Fishing, which went up by 2.5% and Construction climbed by 7.0%.

Mining hurt by production suspension at JISCO

Decreased output of 8.2 per cent from the Food, Beverages & Tobacco and 14.6 per cent from the Other Manufacturing sub-industries, contributed to the decline in the Manufacturing industry. Lower levels of output in the Mining & Quarrying industry was largely due to the continued impact from the suspension of production in September 2019 at the Jiuquan Iron and Steel Company (JISCO) Alpart refinery.

According to STATIN, “The Jamaican economy increased by 8.3 per cent for the third quarter of 2020 when compared to the second quarter of 2020. This was the result of increases in both the Services and Goods Producing Industries of 8.0 per cent and 9.0 per cent respectively.”

This performance reflected the relaxation in some of the measures instituted in the second quarter of 2020 to limit the spread of COVID-19.