New forecasts suggest the economy could shrink this financial year by up to ten percent.
The Bank of Jamaica (BOJ) has revised its forecasts from a contraction of four to seven percent and says it now believes the economy will shrink by between seven and 10 per cent during the 2020/21 fiscal year.
The gloomy forecast is based on the impact of COVID-19.
Speaking at the Central Bank’s digital quarterly press briefing on Wednesday, August 26, Governor Richard Byles said the projected seven to ten percent decline in 2020/21 financial year is a revision of the BOJ’s earlier forecast in the range of four to seven per cent .
The Governor pointed out, however, that partial economic recovery is expected to commence in the 2021/22 fiscal year, with anticipated growth of three to six per cent.
“Notwithstanding the expectations for growth, the Jamaican economy is not expected to return to pre-COVID-19 levels before 2022/23,” Mr. Byles added.
He said the impact of COVID-19 on the domestic economy has been “significant”, noting that the Bank’s worsened outlook is largely associated with the virus’ resurgence in major trading partner countries, such as the United States of America (USA), and updated assessments of the impact of the crisis on some local sectors.
He said weaker performances are expected within the transport, storage and communication, electricity and water, construction, and hotels and restaurant sectors, between June and March 2021.