View the information below regarding the economy of Jamaica. The summary and statistics contains
gdp, industry, agriculture and more for Jamaica. If you need other information please visit the
Jamaica Country Page.
GDP (2002): $7.335 billion.
Real growth rate (2002): 1.0%.
Per capita GDP (2001): $2,771.
Natural resources: Bauxite, gypsum, limestone.
Agriculture: Products--sugar, bananas, coffee, citrus fruits, allspice.
Industry: Types--tourism, bauxite and alumina, garment assembly, processed foods, sugar, rum, cement, metal, chemical products.
Trade (2002): Exports--$1.14 billion: alumina, bauxite, sugar, bananas, garments, citrus fruits and products, rum, coffee. Major markets (2000 data)--U.S. 39.1%, U.K. 11.2%, Canada 10.2%, Netherlands 22.0%, Norway 9.1%, CARICOM 3.7%, Japan 2.3%. Imports (2000)--$3.191 billion: machinery, transportation and electrical equipment, food, fuels, fertilizer. Major suppliers (2000)--U.S. 44.8%, Trinidad and Tobago 10.0%, Japan 6.0%, U.K. 3.1%, Canada 3.1%, Mexico 4.8%, Venezuela 3.9%.
Economy of Jamaica
Jamaica has natural resources, primarily bauxite, adequate water supplies, and climate conducive to agriculture and tourism. The discovery of bauxite in the 1940s and the subsequent establishment of the bauxite-alumina industry shifted Jamaica's economy from sugar and bananas. By the 1970s, Jamaica had emerged as a world leader in export of these minerals as foreign investment increased.
The country faces some serious problems but has the potential for growth and modernization. After 4 years of negative economic growth, Jamaica's GDP grew by 0.8% in 2000. Inflation fell from 25% in 1995 to 6.1% in 2000 and 7.0% in 2001. Through periodic intervention in the market, the central bank prevented any abrupt drop in the exchange rate. The Jamaican dollar has been slipping, despite intervention, resulting in an average exchange rate of J$47.4 to the U.S.$1.00 (Dec. 2001). Although interest rates continue to decline from 1995 levels, they are still high, averaging 26.8% in December 2001.
Weakness in the financial sector, speculation, and low levels of investment erode confidence in the productive sector. The government raised $3.6 billion in new sovereign debt in local and international financial markets in 2001. This was used to meet its U.S. dollar debt obligations, to mop up liquidity to maintain the exchange rate, and to help fund the current budget deficit. Net internal reserves rose from $969.5 million at the beginning of 2001 to $1.8 billion at the end of the year.
Jamaican Government economic policies encourage foreign investment in areas that earn or save foreign exchange, generate employment, and use local raw materials. The government provides a wide range of incentives to investors, including remittance facilities to assist them in repatriating funds to the country of origin; tax holidays which defer taxes for a period of years; and duty-free access for machinery and raw materials imported for approved enterprises. Free trade zones have stimulated investment in garment assembly, light manufacturing, and data entry by foreign firms. However, over the last 5 years, the garment industry has suffered from reduced export earnings, continued factory closures, and rising unemployment. This can be attributed to intense international and regional competition, exacerbated by the high costs of operations in Jamaica, including security costs to deter drug activity. The Government of Jamaica hopes to encourage economic activity through a combination of privatization, financial sector restructuring, falling interest rates, and by boosting tourism and related productive activities.