Jamaican economy already feeling effects of Russia-Ukraine war, says Clarke
Finance and Public Service Minister, Dr Nigel Clarke says the Jamaican economy is already feeling the effects of the Russia-Ukraine war. He says the Government is “closely monitoring the developments and the reaction of the market”.
Clarke, who made the comments as he opened the 2022/23 Budget Debate in Gordon House Tuesday afternoon, sought to assure that “Jamaica has the wherewithal to withstand the crisis”.
Clarke noted that the war, which is now two weeks old, represents “the most significant conflict and the largest exodus of people in Europe since World War Two”. The minister pointed out that already, over two million people have fled Ukraine to other parts of Europe.
“The outcome of both the military assault and the subsequent economic sanctions are uncertain. However, the negative effects on the world, including Jamaica, are already beginning to manifest themselves and could get worse,” Clarke told the House. He said there are three economic channels through which the crisis can impact Jamaica, including an increase in prices for energy and other commodities, including wheat and other grains. Clarke noted that higher commodity prices mean that inflation for the upcoming fiscal year could be higher than previously anticipated.
Additionally, he said inflationary pressures could exacerbate recent supply chain disruptions, potentially negatively impacting the COVID rebound by reducing the prospect for global economic growth that could slow because of the Ukraine crisis.
And Clarke also pointed to the adverse financial flows that is likely as global investors seek safer assets.
Meanwhile, Clarke said the government will take steps to ensure that the poor and vulnerable are protected from the worst effects of the crisis.
He extended “deepest condolences on behalf of the government of Jamaica for the lives that have been lost and the devastation that has occurred in the Ukraine as a result of recent hostilities in that country.
The minister noted that Jamaica has joined with most countries around the world, and with the United Nations. In the condemnation of the government of Russia for violating the sovereignty of Ukraine.
