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Review of Economic Performance April – June 2013

Review of Economic Performance April – June 2013. Planning Institute of Jamaica August 27, 2013. Overview April to June 2013. Real GDP declined by an estimated 0.4% for April-June 2013 relative to the similar period of 2012, reflecting declines of:

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Review of Economic Performance April – June 2013

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  1. Review of Economic PerformanceApril – June 2013 Planning Institute of Jamaica August 27, 2013

  2. OverviewApril to June 2013 • Real GDP declined by an estimated 0.4% for April-June 2013 relative to the similar period of 2012, reflecting declines of: • an estimated 1.6% in the Goods Producing Industry • 0.3% in the Services Industry Planning Institute of Jamaica

  3. Real Value Added Growth in the Goods Producing Industries (%) Planning Institute of Jamaica

  4. Agriculture • Real Value Added in the Agriculture industry declined by8.0% based on PIOJ’s production index: • Traditional Export crops, down 44.4%; • Other Agricultural Crops down by 3.3%. • Post Harvest Activities up 72.5% • This performance largely reflected: • The continuation of drought conditions • Delay in recovery of longer term crops such as bananas, plantains, yams and other tubers from the impact of Hurricane Sandy. Planning Institute of Jamaica

  5. Mining & Quarrying • Real Value Added increased by 5.0% reflecting: • increased production of the heavier weighted alumina component as crude bauxite production declined • The increase in Alumina production (up 8.6%) reflected higher output levels at the Jamalco plant resulting in an increase of 1.1 percentage points in the Alumina Capacity Utilization rate. • Crude bauxite production (down 4.4%) was impacted by lower global demand resulting in a decline of 4.1 percentage points in the Bauxite Capacity Utilization rate. Planning Institute of Jamaica

  6. Manufacture Industry • Real Value Added was estimated to have declined by 0.4 per cent: • Other Manufacturing (down 1.0%) reflecting declines in: • Chemicals & Chemical Products • Aluminium Sulphate, down 57.8% • Rubber & Plastic Products • Other Plastic Products, down 13.5% • Food, Beverages & Tobacco flatdue to : • Dairy Products (up 33.2%); Poultry Meat (up 6.2%); Flour (up 4.8%); counterbalanced by • Sugar, down 29.3%; Molasses, down 35.1%, Condensed Milk, down 12.5%; Edible Oils, down 12.3% Planning Institute of Jamaica

  7. Construction • Real Value Added in the Construction industry grew by 1.5%, reflecting: • Growth in Building Construction due to: • Higher levels of Residential Construction: • Increases in the number of housing starts (up 219.6%), housing completions (up 37.4%) and the volume (up 17.7%) and value (up 25.3%) of mortgages for the period. • A contraction in the Other Construction component which includes Civil Engineering (road works) due to lower expenditure by: • NROCC down 92.1 per cent to $0.2 billion • NWA down 69.4 per cent to $1.4 billion • Increased expenditure was recorded by: • NWC up 112.2 per cent to $1.8 billion • Telecommunications up 224.1 per cent to $639.4 million Planning Institute of Jamaica

  8. Real Value Added Growth in the Services Industries (%) Planning Institute of Jamaica

  9. Electricity & Water • Real value added for the Electricity & Water industry declined by 0.1%: • Gross Electricity generation, down 0.1% • JPS generation, down 11.9% • Non-JPS generation, up 22.0% • Water production down 1.0%,reflecting: • 1.2%decline in the Western division • 2.3% decline in the Eastern division Planning Institute of Jamaica

  10. Transport, Storage & Communication • Real Value Added for Transport, Storage & Communication declined by 0.2% due to: • A decline in the Transport & Storage segment reflecting: • a reduction of 6.2% in Maritime Cargo volume handled due largely to the 7.2% decreasein Cargo handled at Outports and a 3.9% decrease in Cargo handled at the Port of Kingston • The Communication component is estimated to have grown mainly reflecting increased telecommunications activities associated with intensified competition among the players. Planning Institute of Jamaica

  11. Finance & Insurance Services • Real value added for the Finance & Insurance Industry declined by an estimated 2.5% reflecting: • A real decline in net-interest income associated with the National Debt Exchange Planning Institute of Jamaica

  12. Wholesale & Retail Trade: Repair and Installation of Machinery (WRTRIM) • Real Value Added for the WRTRIM industry increased by0.4% due to: • Higher gross sales levels reflecting: • Increases in the volume (up 11.2%) and value (up 15.5%) of ABM and Point of Sale Transactions respectively • Improvements in the performance of the Construction industry • Higher sales were recorded for: • Minerals, Fuels, Lubricants & Petroleum Products, up 5.9%; • Hardware, Building Supplies & Electrical Goods, up 8.4% • Automobiles, Commercial & Transport Equipment, up 1.7% • Chemicals, Pharmaceuticals & Cosmetics up 8.3%; and Planning Institute of Jamaica

  13. Tourism • Real Value Added for Hotels & Restaurants increasedby 0.2% • Total Visitor Arrivals, down 4.6% • Preliminary Stopover Arrivals, up 0.3%. • Cruise Passenger Arrivals, down 13.7% • Visitor Expenditure, down 0.5% to US$502.0 million Planning Institute of Jamaica

  14. The Macroeconomic Environment • The performance during the quarter took place against the background of: • Quarterly inflation rate of 1.1% • Fiscal deficit of $5.41 billion • Depreciation of the exchange rate Planning Institute of Jamaica

  15. Inflation • Inflation for the April – June 2013 quarter was 1.1% due mainly to the increase in Food & Non Alcoholic Beverages (up 2.4%). Thisdivisionaccounted for 84.0% of overall inflation. • The out-turn reflected: • Weather related shocks: • Lagged impact of Hurricane Sandy on longer term crops • Higher foods prices due to drought conditions • Depreciation of the Jamaican dollar • Impact of new GoJ Revenue Enhancement Measures • Increased grain prices on the international market • For January - June 2013 the inflation rate was 3.9% Planning Institute of Jamaica

  16. Fiscal Accounts • The fiscal deficit was $5.4 billion for the quarter • This was $4.8 billion lower than budgeted due to: • $5.6 billion (1.0 per cent) less than programmed expenditure • $0.8 billion (0.7 per cent) lower than programmed revenue • Revenue & Grants totalled $87.03 billion in April-June 2013, while Expenditure totalled $92.44 billion. Planning Institute of Jamaica

  17. Exchange Rate The average nominal exchange rate at the end of June 2013 was $101.38 per US$1.00, representing 2.5% nominal depreciation compared with end of March 2013. This translates into a real exchange rate depreciation of 1.7% relative to the US dollar

  18. Labour Market Indicators Planning Institute of Jamaica

  19. Labour Market Indicators • Total employed labour force increased by 8,700 persons to 1,107, 400 compared with the April 2012. • Total unemployed labour force increased by 30, 200 persons in April 2013 compared with the level recorded in April 2012. This reflected the reduction in ‘persons outside the labour force’. • The unemployment rate for April 2013 was 16.3 per cent compared with a rate of 14.4 per cent in April 2012. This was the highest quarterly rate recorded since April 1997 (16 year high). August 28, 2014 Planning Institute of Jamaica 19

  20. Short-Term Prospects & Developments July-September 2013 • Short-term prospects for the overall economy are generally positive based on: • Expected return to positive performance by most industries reflecting a resurgence in output following the impact of Hurricane Sandy • Continued roll-out of several growth inducing capital projects approved in the 2013/2014 budget • Some restoration of investor confidence with the passing of the first quarterly International Monetary Fund test • Continuing global economic recovery • Downside Risks • Higher commodity prices • Hurricane season Planning Institute of Jamaica

  21. InflationJuly 2013 • Inflation for July 2013 was 0.5%, largely reflecting: • Food and Non-Alcoholic Beverages (up 0.6%) • Housing, Water, Electricity, Gas and Other Fuels (up 0.8%) • Communication (down 3.7%), detracted from the inflation out-turn Planning Institute of Jamaica

  22. Tourism July 2013 Provisional data indicate: Airport arrivals declined by 0.2% Cruise passenger arrivals increased by 7.0% to 79 946 August 28, 2014 Planning Institute of Jamaica 22 Planning Institute of Jamaica

  23. Mining & Quarrying July 2013 • Total bauxite production declined by 7.0% due to: • 9.0%decrease in crude bauxite production • 8.8% decrease in alumina production • Total Bauxite exports increased by 10.9% due to: • Alumina exports, up 30.3% • Crude bauxite exports, down 5.4% Planning Institute of Jamaica

  24. Electricity & Water Supply July 2013 • Total electricity generation declined by 0.6% per cent to 366.5million kwh • Total electricity sales declined by 3.0% per cent to 267.5 million kwh Planning Institute of Jamaica

  25. GrowthJuly-September 2013 • Real GDP is projected to grow within the range of 0.5% to 1.5% during July-September 2013 vis-a-vis July-September 2012. August 28, 2014 Planning Institute of Jamaica 25

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