Pre-Melissa output levels is now within 1½ to 2 years of the event

Durrant Pate/Contributor

The Planning Institute of Jamaica (PIOJ) is seeing a faster than expected recovery for the economy from Hurricane Melissa from three years to 1½ to 2 years. 

PIOJ Director General, Dr. Wayne Henry says this is based on a number of factors such as the institute’s projection of the economy returning to growth during October to December 2026 with the main supporting factors including:

1. Faster pace of recovery for most industries due to the gradual easing of the adverse impact of Hurricane Melissa.

2. Full operationalisation of the National Reconstruction and Resilience Authority (NaRRA) by the latter half of the fiscal year, which is expected to drive reconstruction efforts and further stimulate construction activity.

3. Timely resolution to the ongoing conflict in the Middle East, and

4. Favourable weather conditions, to support the recovery in agricultural output and water production. 

Changing from earlier projections

Addressing the PIOJ’s Quarterly News Briefing yesterday, Dr. Henry explained that immediately following Hurricane Melissa, the PIOJ projected that a return to pre‑Melissa levels of output would take up to three years, that is, by FY2028/29. This estimate was grounded in the patterns observed following previous weather‑related and other external shocks.

“However, given the pace of recovery so far, the current expected timeline for attaining pre-Melissa output levels is now within 1½ to 2 years of the event, that is, as early as the April to June quarter of 2027. Note however, that full recovery to include rebuilding efforts and replacing housing stock, public infrastructure and livelihoods will be over a more extended period, possibly 3–5 years,” the PIOJ Director General also explained.

However, there are certain risks to these projections such as:

1. Weather-related shocks, largely associated with the start of the hurricane season and the impact of the “Super El Nino” on vulnerable industries.

2. A worsening of geopolitical tensions, which may result in further inflationary pressures on energy and other commodity prices.

3. Delays in the execution of major infrastructure projects, which would constrain the economy’s medium-term growth potential.

Negative short-term economic outlook

The short-term prospects for the overall economy in the current July–September 2026 & FY2026/27 are negative with the economy projected to contract within the range of 0.5% to 1.5% for July–September 2026. That is lower output is anticipated, as industries continue to recover from the adverse effects of the hurricane.

Dr. Henry emphasized, “it is important to note, however, that as economic recovery intensifies, the expectation is that for each subsequent quarter, the rate of contraction will be progressively smaller, ultimately returning to growth during October to December 2026. For FY2026/27, the PIOJ’s projection is for real GDP growth within the range of 1.0% to 3.0%.”

Economic performance for January–June 2026, real GDP is estimated to have contracted by 3.5%. However, for FY2026/27, the PIOJ’s projection is for real GDP growth within the range of 1.0% to 3.0%.