Durrant Pate/ Contributor

Jamaica’s national budget for the current 2025/2026 financial year has risen by $29.3 billion to take account of the fall-out caused by Hurricane Melissa just over a month ago, resulting in damage estimated at US$8.8 billion, which is equivalent to 41% of the country’s 2024 gross domestic product (GDP).  

The Third Supplementary Estimates of Expenditure for the fiscal year, which was tabled in Parliament yesterday by Finance Minister Fayval Williams, shows a planned expenditure of $1.37 trillion, up from the $1.27 trillion, which was approved earlier this year. The revised spending plan comes as the country grapples with the economic fallout and recovery efforts caused by the Category 5 storm, which hit Jamaica on October 28, 2025.

The supplementary budget follows the announcement of a US$6.7 billion (just over J$1 trillion) support package from five major international financial institutions to aid Jamaica’s recovery and reconstruction efforts over the next three years. The Ministry of Economic Growth and Infrastructure Development will receive the lion’s share of the $29.3 billion additional national expenditure, with $7.2 billion more being allocated for road infrastructure and the procurement of 3,300 containerised housing units.

Next in line is the Ministry of Local Government and Community Development, which has been allocated $4.6 billion to assist with post-hurricane relief efforts, fund the National Solid Waste Management Authority’s pre and post-hurricane clean-up exercise, as well as provide support to the municipal corporations. The Ministry of Tourism will get an additional $3.4 billion, while the Ministry of Water, Environment and Climate Change has been allocated an additional $3.2 billion and the Ministry of Agriculture, Fisheries and Mining $3 billion more.

The Ministry of Energy, Transport and Telecommunications has been budgeted an additional $1.5 billion. The 3^rd supplementary budget has been referred to Parliament’s Public Administration and Appropriations Committee, which will meet next week to examine estimates before approval by the House of Representatives.                                                                                    

Parliament approves fiscal rules relaxation

In the meantime, the House yesterday approved an order mandating a one-year relaxation of Jamaica’s fiscal rules for one year, amid the local economy island taking a 5.3% GDP hit from Melissa. This suspension will give the Holness administration the space it needs to conduct the recovery and construction necessary in the aftermath of the devastating hurricane. Where an extension is warranted, the Finance Ministry will present the case to the Parliament.

For this year alone the Planning Institute of Jamaica, Bank of Jamaica and her ministry verified to the Fiscal Commission that the impact of the hurricane on the economy is at least 1.5 per cent of GDP, while the fiscal impact is estimated at 5.3 per cent of GDP over fiscal year 2025/2026 to fiscal year 2029/30, which Minister Williams explained is well above the legislative threshold of 1.5 per cent to trigger suspension of the fiscal rules. 

The Minister told the Lower House of Parliament that real GDP is now projected to decline by 4.3 per cent for fiscal year 2025/26 compared to the growth forecast of 2.2 per cent presented in the Fiscal Policy Paper in February this year. For the medium term, real GDP growth is projected to average in the range of one to two per cent as the economy recovers from the contraction projected for the current fiscal year.