Jamaica unlikely to face recession, say economists

  

 

Two economists say Jamaica is not likely to face a recession given the reconstruction activities that have been taking place in earnest post-Hurricane Melissa.

 

Dr. Wayne Henry, Director of the Planning Institute of Jamaica (PIOJ), on Tuesday reported that with Jamaica recording a significant year-on-year decline in the October to December 2025 quarter, and expectation for a further year-on-year contraction in the January to March 2026 quarter, there are concerns regarding the possibility of an economic recession. 

 

However, at this stage, he said, it is not likely that Jamaica will experience an economic recession within the short term, barring any unforeseen shocks.

 

Speaking Wednesday on the Morning Agenda on Power 106, Economist Joseph Cox and Development Economist Dr. Christian Stokes said the island is in a V-shape recovery, which means that while the economy will contract, it will bounce back.

 

Mr. Cox scoffed at talk of a possible recession. 

 

"There are recessionary impulses coming out of a hurricane impact; that's a given.... For me, that is not even worth a conversation because we're looking at the recovery phase of [the hurricane]. Yes, technically, recessions are defined by two consecutive quarters of decline. Given what we are seeing coming out the reconstruction activities, the rapid recovery in terms of electricity, etc, etc, to me that is not even a conversation worth having against the backdrop of the hurricane. But what we look at now is how will the economy be impacted by other geopolitical developments - which I don't think will carry us into any recession," he contended. 

 

Both economists argue that the real concern for the economy is the impact of further increases in oil prices due to the geopolitical war in the Middle East.

 

Dr. Stokes said an oil price shock will affect every area of life in Jamaica. 

 

He also stressed the need for borrowed funds to be strategically reinvested in the economy to stimulate growth.

 

"Once you get up and you go on a bike or a car or you turn on your light in your home, you are going to be impacted. So, I'm frankly more concerned about that right now than the recovery from Melissa, which is well underway. My concern about Melissa is the debt that we're taking back to reconstruct. And then my question becomes, when we get those debt dollars, are we investing it in productive things, roads and buildings and infrastructure, to allow persons to engage in business and generate economic activity as opposed to consuming it," he suggested.