Real growth rate
Ultimately, if Jamaica cannot solve its problems by conventional means, it may be persuaded to take the Argentine road of debt renunciation. Since the s, when the country enjoyed growth rates ranging from 2 percent to 8 percent per annum, the island has been unable to sustain high growth rates over an extended period of time.
Jamaica continues to be vulnerable to falling prices and worldwide economic shocks, which have contributed to the pronounced fluctuating nature of its economy. The primary economic problems currently facing the Caribbean nation include high internal debt, a large trade deficit, swollen interest and inflation rates, chronically elevated unemployment levels, as well as low worker productivity, all of which fuel political unrest and escalating gang violence.
However, the position of the economy is Inflation and jamaicas economy to more than just poor policy implementation on the part of national leaders.
External factors also play a large role in its present parlous position. The oil crises of and again in significantly damaged the heavily petroleum-dependent state. During the s and s, both the Manley and Seaga administrations, in an attempt to revamp the economy and with the aid of international financial institutions, embarked on a programme of macroeconomic and structural reform, which focused on liberalizing the economy.
Thus far, these objectives mostly have been met with limited success. The debt situation is alarming and continues to hamper economic growth by drawing heavily upon resources that could be put to more productive uses. The debt overhang also limits the extension of credit to the weaker margins of the private sector, particularly towards medium and small borrowers.
The primary sources of foreign exchange include remittances, tourism and bauxite mining. The worldwide economic recession in the wake of the September 11 terrorist attacks had adverse economic implications for Jamaica. Even though the economy recovered partially between andthe country still faces a number of long-term problems.
The current debt-to-GDP ratio is percent, pointing to a serious budget deficit which only expanded in the wake of Hurricane Ivan because of the expenditures necessary to repair the damage incurred by the natural disaster. During the s, there was a reduction in the inflation rate, which had been in the double digits for much of the s and s.
The benefit of controlling inflation, coupled with an increase in remittances from overseas, brought much of the population above the poverty line, which had declined from a peak of The control of inflation, however, was achieved by increasing net foreign currency reserves, which was partly financed by borrowing.
This eventually sank the country even deeper into debt. In the long run, this borrowing led to more debt financing as more money was allocated towards the payment of loans. This capital could have been far better applied to other sectors of the economy, generating much needed revenue and therefore improving socioeconomic conditions and reducing the alarming incidence of crime.
Unfortunately, the inflation rate, which was in single digits sinceonce again entered double figures in While the inflation rate is still in double figures as of The Debt Crisis The crisis currently affecting the Jamaican economy with respect to high debts, interest rates and burgeoning trade deficits, is grounded in the severe economic setbacks of the s.
This decade was characterized by negative or otherwise abysmal economic growth and high levels of unemployment. After realizing economic growth rates of 5. Furthermore, Jamaica experienced negative growth rates in GDP during the period, when unemployment rates averaged over 18 percent.
The Jamaican government absorbed debts amounting to 44 percent of GDP in the wake of the financial sector crisis ofone of the most crushing economic catastrophes in the world in terms of its effects on GDP.
This crash was due to the poor regulation and management of the Jamaican financial sector.Jamaica’s trade deficit at the end of August stood at US$2, million. This is an increase of per cent when compared to US$2, million which was recorded for the similar period in initiativeblog.com · Jamaica’s Emerging Economy and Its Increasing International Competitiveness Jamaica’s Emerging Economy and Its Increasing International Competitiveness 2 in the years ahead as Jamaica’s developing economy offers more and more appealing jobinitiativeblog.com This statistic shows the average inflation rate in Jamaica from to , with projections up until In , the average inflation rate in Jamaica amounted to about percent compared initiativeblog.com · Jamaica's economy has grown on average less than 1% a year for the last three decades and many impediments remain to growth: a bloated public sector which crowds out spending on important projects; high crime and corruption; red-tape; and a high debt-to-GDP initiativeblog.com://initiativeblog.com · Jamaica's economy was rather open.
Trade as a ratio of GDP was estimated to be over 50 percent in the s, a percentage believed to be increasing in the s. As part of structural adjustment policies to further open up the economy, the Jamaican dollar initiativeblog.com 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.