Is Jamaica in a recession?.
Jamaica’s economic denial
Picture this: It’s a sweltering afternoon in Ocho Rios, where the vibrant pulse of reggae echoes through the tourist-filled streets. A local fisherman, accustomed to selling his daily catch to cruise ship visitors, leans against his weathered boat, staring out at a quieter-than-usual harbour. “Business slow, mon,” he mutters, citing fewer tourists since Hurricane Beryl battered the island last July and Tropical Storm Rafael followed suit.
His story isn’t unique. Across Jamaica, from Montego Bay’s hotels to Kingston’s markets, whispers of economic strain are growing louder. Yet, as of February 2025, Jamaica’s top officials, including Prime Minister Andrew Holness and Finance Minister Fayval Williams, insist the economy isn’t in a recession. I respectfully disagree. The data — and the lived experiences of Jamaicans — tell a different story.
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The Statistical Institute of Jamaica’s (Statin) recent Consumer Price Index (CPI) report for January 2025, released on February 17, paints a nuanced picture. Month-over-month inflation dipped by -0.3 per cent, driven by declines in food (-1.3 per cent) and housing/utilities (-0.3 per cent), while restaurant services (+2.2 per cent) and education (+1.8 per cent) saw price hikes. However, year-over-year, from January 2023 to January 2025, inflation stands at a moderate 4.7 per cent, with food prices soaring by 7.4 per cent — a burden for many households. Other data reveal inflation peaking at 6.6 per cent in mid-2023 before declining to 4.7 per cent by January 2025, reflecting a cooling but persistent pressure on costs (see Statin’s visual at www.statinja.gov.jm for details).
But CPI alone doesn’t capture the full economic story. The Planning Institute of Jamaica (PIOJ) has confirmed what many feared: The economy contracted by 3.5 per cent in the July to September 2024 quarter and 1.8 per cent in the October to December 2024 quarter. That’s two consecutive quarters of decline — economists’ textbook definition of a recession.
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Yet, government officials are quick to dismiss this reality. Prime Minister Holness, in recent statements found on social media platforms, has declared, “Jamaica is not in a recession… we are confident that the Jamaican economy is strong and will rebound.” Similarly, PIOJ Director General Dr Wayne Henry argues that, despite the downturn, “the macro economy remains relatively strong” due to other indicators like low unemployment and consumer confidence. But independent economist Dr Marlene Beckford of The University of the West Indies counters, “The consecutive GDP [gross domestic product] declines, coupled with rising food prices [up 7.4 per cent year-over-year] signal a recessionary environment, regardless of unemployment figures.” Finance Minister Williams, meanwhile, has acknowledged the contraction but framed it as a temporary setback caused by “hydrological shocks” like hurricanes and storms, not a structural collapse.
This denial feels like a political lifeline, but it risks eroding trust, especially for low-income families in rural areas, where food price hikes and hurricane damage have halved incomes. For rural farmers in St Elizabeth, already battered by Hurricane Beryl’s destruction, the -1.3 per cent drop in food prices in January 2025 offers little relief when incomes have shrunk and input costs remain high. Meanwhile, urban workers in Kingston face higher restaurant and accommodation costs (+6.2 per cent), straining household budgets further. On X, Jamaicans have voiced frustration, with one user posting, “PM says no recession, but my shop sales are down 30 per cent since Beryl — tell that to my bills!” This disconnect between official optimism and lived reality underscores the urgency of addressing the recession shead-on.
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Jamaica’s current economic contraction isn’t an isolated incident. Historically, the island faced a similar GDP decline during the 2008 global financial crisis with a 1.7 per cent contraction in 2009, but recovery took nearly three years due to sluggish tourism and high debt levels — parallels we see today. Unlike Barbados, which saw 2.1 per cent growth despite hurricanes in 2024 due to diversified services, Jamaica’s heavy reliance on tourism and agriculture (accounting for over 50 per cent of jobs) has left it more vulnerable, with a 3.5 per cent contraction in quarter three in 2024. The World Bank’s latest report notes Jamaica’s susceptibility to external shocks, while the International Monetary Fund (IMF) warns of “persistent risks from climate events”, reinforcing that this recession isn’t just technical — it’s structural.
Some might argue that low unemployment and steady consumer spending, as Henry suggests, softened the blow. But low unemployment can mask underemployment or precarious work, especially in tourism-reliant areas hit hard by fewer visitors. The PIOJ’s own projections suggest the economy will contract by 0.5 per cent to 1.5 per cent for the 2024/25 fiscal year, with only modest growth of 0.1 per cent to 1.0 per cent expected in the January to March 2025 quarter. These numbers don’t scream strength — they whisper of a struggle.
Opposition voices, like Senator Peter Bunting, have been more forthright, warning in January 2025 that Jamaica is “on the brink of a technical recession”, in alignment with the data, but met with pushback from the ruling Jamaica Labour Party (JLP), which seems intent on maintaining an optimistic facade.
Jamaica’s fiscal stability, built on years of debt reduction — from 142 per cent of GDP in 2009 to 94 per cent by 2019, per IMF reports — and prudent monetary policy by the Bank of Jamaica gives us a buffer. However, it can’t mask the GDP decline or the rising cost of living, particularly for vulnerable groups. The 7.4 per cent rise in food prices over two years signals persistent pressure on low-income families, and while inflation gradually declined from 6.6 per cent in mid-2023 to 4.7 per cent in January 2025, this is still a far cry from stability for those struggling to afford basics.
So why the reluctance to call it a recession? Politically, admitting economic contraction could undermine confidence in the JLP ahead of the next general election. Economically, it might spook investors or worsen consumer sentiment. But denial doesn’t solve problems — it delays solutions. Jamaica needs targeted interventions: relief funds for small businesses, investment in climate-resilient agriculture, and diversification beyond tourism to attract high-value visitors, and reduce reliance on cruise ships. Ignoring the recession risks prolonging recovery, as seen in the 1990s when structural reforms lagged behind public need.
The fisherman in Ocho Rios isn’t waiting for official pronouncements to feel the pinch. Neither should we. Jamaica is in a recession — technical or otherwise — and it’s time for leaders to face that truth, rally resources, and chart a path to recovery. Anything less is just noise against the reggae beat of economic reality.
For a deeper dive, check Statin’s CPI infographic or PIOJ’s latest economic outlook at www.pioj.gov.jm.
janielmcewan17@gmail.com
