Economic Analysis of Jamaica
The Economic Outlook for Jamaica 2012-2014
The Jamaican economy is based on the free market model, and has few restrictions on trade, investment and movement of currency. The major productive sectors over the years have included tourism, mining, agriculture, information technology & telecommunications, manufacturing and the entertainment sector. Jamaica’s economy is presently very dependent on services, according to the CIA world fact book report of 2010, with it accounting for more than sixty (60%) of GDP. The country is also highly indebted and has a debt to GDP ratio of over 120%, indicating that based on Jamaica’s GDP it is extremely difficult for the country to pay off its increasing debt. Adding to this is the IMF loan agreement which Jamaica signed in 2010, with the country borrowing an incredible $1.27 billion dollars. Jamaica is also facing a bullet payment of US$400m in 2011 in the face of a threat from Standard & Poor 's (S&P) to either generate faster growth or accept a downgrade of its public-debt rating (Bullock, 2011).
Jamaica’s economy at present is in a very sad state and any rational investor would require some serious signs of reform and indication of potential economic growth before allowing their money to enter the Jamaican economic system. The economic analysis and forecasting which is discussed below will be extremely essential for making investment decisions in Jamaica. The starting point in our economic analysis is an investigation of Jamaica’s major macroeconomic factors; this will help to determine whether the general outlook of the economy is favourable for the period 2012-2014. Some of the major indicators in focus are exchange rate, interest rate, consumer price index, GDP and BOP. These factors according to economists have the most impact on stock price movement as well as business performance in general.
In the table below adopted from the Economic Commission for Latin America and the Caribbean (ECLAC) we
The Jamaican economy is based on the free market model, and has few restrictions on trade, investment and movement of currency. The major productive sectors over the years have included tourism, mining, agriculture, information technology & telecommunications, manufacturing and the entertainment sector. Jamaica’s economy is presently very dependent on services, according to the CIA world fact book report of 2010, with it accounting for more than sixty (60%) of GDP. The country is also highly indebted and has a debt to GDP ratio of over 120%, indicating that based on Jamaica’s GDP it is extremely difficult for the country to pay off its increasing debt. Adding to this is the IMF loan agreement which Jamaica signed in 2010, with the country borrowing an incredible $1.27 billion dollars. Jamaica is also facing a bullet payment of US$400m in 2011 in the face of a threat from Standard & Poor 's (S&P) to either generate faster growth or accept a downgrade of its public-debt rating (Bullock, 2011).
Jamaica’s economy at present is in a very sad state and any rational investor would require some serious signs of reform and indication of potential economic growth before allowing their money to enter the Jamaican economic system. The economic analysis and forecasting which is discussed below will be extremely essential for making investment decisions in Jamaica. The starting point in our economic analysis is an investigation of Jamaica’s major macroeconomic factors; this will help to determine whether the general outlook of the economy is favourable for the period 2012-2014. Some of the major indicators in focus are exchange rate, interest rate, consumer price index, GDP and BOP. These factors according to economists have the most impact on stock price movement as well as business performance in general.
In the table below adopted from the Economic Commission for Latin America and the Caribbean (ECLAC) we