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JAMAICA | Investment in Jamaica moving in right direction says Finance Minister

Featured Finance and Public Service Minister Dr. Nigel Clarke. Finance and Public Service Minister Dr. Nigel Clarke.
Kingston, Jamaica: 11 July 2018 - Against the background of concerns from the Opposition that Jamaica's economy was under performing, Finance Minister Dr. Nigel Clarke is pointing to data that confirms that Foreign Direct Investment into Jamaica is headed in the right direction. 
In a statement, the PNP said it had taken note of a recent report from the Economic Commission for Latin America and the Caribbean (ECLAC) which indicated that foreign direct investment (FDI) into Jamaica declined for two successive years, in 2016 and 2017, with the decrease being 17.8 per cent last year.
 
The party further noted that in contrast, FDI in the Caribbean region as a whole grew by 20 per cent in 2017.

However, the Finance Minister who is in Frankfurt, Germany, leading a delegation on the European leg of Jamaica’s Investor Roadshow, stated that, "According to data provided by the Bank of Jamaica, for fiscal years 2016/17 and 2017/18 the average Foreign Direct Investment (FDI) was 20% higher than average FDI over the Fiscal Years 2012/13 to 2015/16. “

"FDI fluctuates on a year over year basis and, by definition; FDI can be lumpy with one-off anomalies. To get a better picture of the trend or the direction of FDI, it is better to look at averages over periods of time. Averages smooth out one off aberrations. The latest trend shows that FDI is moving in the right direction, this period being 20% higher than the previous." Clarke emphasized.

The Minister of Finance explained that one way to get a good sense of investment into the Jamaican economy is to look at the importation of Capital Goods. Capital Goods, he explained, consists of equipment & machinery used in production of goods and services.

"The higher the importation of capital goods, the more investment for future production, manufacturing and growth;" he pointed out in a press release today.

"The 2017/18 fiscal year saw Capital Goods importation rise above US$ 1 billion for the first time in several decades compared with 2015 when Capital Good importation was just over US$500 million”, the Minister stated.

"In fact when you compare the period 2012/13 to 2015/16 with the period 2016/17 to 2017/18, Bank of Jamaica data show that average annual importation of Capital Goods has increased by 84%. This kind of movement is hugely significant and is consistent with what we know: there is heavy investment in the production, manufacturing, construction, energy, infrastructure, logistics and tourism sectors which is an excellent indicator for the Jamaican economy;" he stated.

Another measure that the Minister referenced was bank loans combined with capital market credit to the non-financial private sector. “While this measure hovered between 33% and 34% of GDP between Dec 2013 and Dec 2015, total private sector borrowing jumped to 40% of GDP by Dec 2017. This again reflects increasing investment in the Jamaican economy which augurs well for the future.”

The Minister was apparently responding to concerns by Opposition Spokesman on Finance Mark Golding, who said Jamaica's economy was underperforming, by virtue of a recent report from the Economic Commission for Latin America and the Caribbean (ECLAC) which indicated that foreign direct investment (FDI) into Jamaica declined for two successive years, in 2016 and 2017, with the decrease being 17.8 per cent last year.

 

  • Countries: Jamaica

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