Even as the local economy went on to register its second consecutive quarter of contraction, falling 1.8 per cent between October to December of last year, the Planning Institute of Jamaica (PIOJ) has said the country is not in a recession.

Following raging public debate on the matter in recent weeks, the entity, in presenting preliminary estimates on GDP output for the last quarter of 2024, confirmed its finding during a quarterly briefing held Wednesday morning.

“The Jamaican economy though facing a downturn in output is not in a recession, however there remains significant challenges due to hydrological shocks reflected largely in the fall-outs in tourism, electricity and water supply and agriculture,” PIOJ Director General Dr Wayne Henry said.

Though partially meeting the requirements of what constitutes a recession based on definition, Henry, in noting the positions of macro-fiscal institutions such as the World Bank and International Monetary Fund (IMF) which regard the use of GDP alone as being an insufficient measure to determine a recession, said the consideration of a wider set of economic indicators such as income, employment and fiscal health should also be used to determine if a country is truly experiencing a recession.

With Jamaica said to be maintaining good macroeconomic health as seen by its record unemployment levels and high consumer confidence, the interruption of economic activity as a result of seasonal adjustments brought on by adverse weather events, he believes, presents a shortfall in making this general assessment.

The PIOJ said the estimated 1.8 per cent contraction which follows a larger 3.5 per cent decline in the Jul-Sept quarter, largely reflects the lingering effects of Hurricane Beryl coupled with that of Tropical Storm Rafael and other events.

Shocks from these events are said to have negatively impacted almost all major industries across both goods-producing and services industries, causing wholesale contraction in several important sub-sectors such as mining, agriculture, manufacturing, construction, hotels and restaurants among others.

With the short-term prospects remaining generally positive, the director general said the expectation is for the economy to return to growth in the current January to March quarter.

“Within this context, economic growth is anticipated for the final quarter of fiscal year 24/25. For the Jan-Mar 2025 quarter, growth is projected to be within the range if 0.1-1.0 per cent. For FY 24/25 the economy will contact within the range of 0.5-1.5 per cent. These contractions largely reflect the negative impact of loss and damage suffered as a result of several hydrological events on productive activities,” Henry noted.