Financial analyst predicts tighter spending this Christmas

 

Financial analyst Dennis Chung is predicting that spending leading up to the Christmas holiday will not be as robust as in previous years.

 

Speaking Wednesday on the Morning Agenda on Power 106 FM, Mr. Chung said the economy is not as vibrant as it would normally be in the Yuletide season.

 

The Planning Institute of Jamaica (PIOJ) is forecasting that the economy will decline by 0 to 1.5 per cent during the December quarter, after dropping by 2.8 per cent in the September quarter.

 

While noting that there are huge crowds at various shopping plazas across Jamaica, Mr. Chung said some shoppers are not spending much. 

 

"It is going to be a tempered holiday season. I think leading up leading up to next week, you might see an increase in expenditure happening, but seeing that some of the money from the road repairs is actually coming out there in terms of the reach, hopefully, we can start some spending also towards the end of the year from the programme, even more spending. So we could be closer to the 0% rather than the 1.5% range that they have," he suggested. 

 

No recession 

 

Meanwhile, the financial analyst said he does not believe the Jamaican economy is in a recessionary environment despite the PIOJ predicting a second consecutive quarter of economic decline for 2024.

 

Mr. Chung said while an indicator of recession is a decline in economic activity for two or more consecutive quarters, trends do not indicate that Jamaica is recessionary. 

 

He argued that a slight decline this quarter would likely be because of the weeks of inclement weather.  

 

"So, I don't really think that the economy is in a recession. If we see that in the first quarter of next year we have a decline, then you could start talking about that, but I don't expect that. With inflation coming down, I expect that the BOJ is going to reduce interest rates even further. Once that happens, I think that you'll start to see a greater uptick in consumer spending, particularly persons looking for mortgages and car loans and that sort of thing," he reasoned.