Friday 3 July, 2020

Brace for contraction of economy as coronavirus threat grows, says PNP

Shadow Minister for Finance, Mark Golding.

Shadow Minister for Finance, Mark Golding.

The Opposition People's National Party (PNP) has stated that Jamaicans should brace for a possible contraction of the economy, based on recently released growth data and the emerging adverse global effects of the novel coronavirus, COVID-19.

In a statement issued Sunday, the Shadow Minister for Finance, Mark Golding, pointed to recent statistics from the Planning Institute of Jamaica which showed that the economy grew by a negligible 0.1 per cent in the final quarter of 2019. He noted that the projection for the 2019/20 fiscal year has been further reduced to 0.6 per cent. 

“With growth having ground to a virtual halt in the second half of 2019, and the impact of the coronavirus now looming, the Jamaican economy could well be headed into a period of economic contraction,” Golding said.

He noted further that “key sectors of the economy are already in negative territory, with the construction sector shrinking by two per cent in the fourth quarter of 2019, and bauxite/alumina in a deep tailspin with the closure of Jisco/Alpart”.

Golding also warned that several industries were at risk.

“Bauxite/alumina faces waning demand from the dislocation in China, tourism is vulnerable due to vacationers' reluctance to risk international travel, and manufacturing is exposed to serious disruption in the international supply chain and much higher prices for alternative sources,” he said. 

Golding said that there has already been a sharp reduction in logistics activity at the Port of Kingston, with port workers being told to take a pay cut or face layoffs.  

"It cannot be business as usual. It is clear the economy has been slowing, and serious challenges lie ahead. The government needs to level with the people and indicate what measures will be pursued to mitigate the adverse impact of this economic storm on ordinary Jamaicans. The Opposition stands ready to join in a national response to the looming crisis, but the government must lead and not bury its head in the sand as events unfold," Golding concluded.

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