Economy of Jamaica

 

The economy of Jamaica is a mixed, free-market economy with state enterprises as well as private sector businesses. In spite of high standards of literacy, modernization and expansion of the fishing industry, and development of the oil industry, most Caribbean nations remain too dependent on tourism and a few exports such as bauxite, sugar, and bananas depend heavily on imported food and fuel.

The Jamaican economy is heavily dependent on services which now accounts for more than 60% of Gross Domestic Product (GDP). The country continues to receive most of its foreign exchange from major sectors like tourism, remittances, agriculture, mining, manufacturing, and financial and insurance services. The leading foreign exchange earners among these are tourism and mining. Backed by multilateral financial institutions since the early 1980s, Jamaica had sought to implement structural reforms aimed at nurturing private sector activity and mounting the role of market forces in resource distribution.

The macro-economic stabilization program introduced in 1991 focused on removing exchange controls, cutting tariffs, stabilizing the Jamaican currency, floating the exchange rate, reducing inflation and removing restrictions on foreign investment. Emphasis given on tight fiscal and monetary policies, greater openness to trade and financial flows have all contributed to a controlled reduction in the rate of inflation. Thus the annual inflation rate has decreased from a high of 80.2% in 1991 to 7.9% in 1998. The real GDP decreased by 1.8% and 2.4% in 1996 and 1997, respectively after a period of steady growth.

Jamaica's economy was marked by low levels of import growth, high levels of private capital inflows and relative stability in the foreign exchange market in 1997, though recent economic performance shows that the economy is recovering. In the late 2004 the economy of Jamaica already burdened with a record of sluggish growth, was hit hard by Hurricane Ivan but managed to make a good come back.

Since the first quarter of 2006, the Jamaican economy has undergone a period of staunch growth. The nominal GDP grew by an unprecedented 2.9% with inflation for the 2006 calendar year down to 6.0% and unemployment down to 8.9%. Jamaica is one of the pioneering members of CARICOM Single Market and Economy (CSME) in 2006. The projection for the year 2008 shows an even higher potential for economic growth with all estimates over 3% and hindered only by urban crime and public policies.

•  GDP (purchasing power parity): $12.71 billion (2006 est.)

•  GDP (official exchange rate): $9.23 billion (2006 est.)

•  GDP - real growth rate: 2.7% (2006 est.)

•  GDP - per capita (PPP): $4,600 (2006 est.)

•  GDP - composition by sector: agriculture: 5.2%

industry: 27.3%

services: 67.5% (2006 est.)

•  Labor force: 1.1 million (2006 est.)

•  Investment (gross fixed): 30.8% of GDP (2006 est.)

•  Public debt: 133.3% of GDP (2006 est.)

•  Industrial production growth rate: -2% (2000 est.)

•  Exports: $2.087 billion f.o.b. (2006 est.)

•  Imports: $4.682 billion f.o.b. (2006 est.)

•  Reserves of foreign exchange and gold: $2.317 billion (2006 est.)

•  Debt - external: $7.384 billion (2006 est.)•  Fiscal year: 1 April to 31 March

 

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