Derick Latibeaudiere, governor of the Bank of Jamaica. - File

The central bank says it is still projecting economic growth of up to 3.5 per cent this fiscal year, despite the Government having to roll back, by nearly half a percentage point, real GDP performance for the financial year just ended.

In fact, Bank of Jamaica (BOJ) governor, Derrick Latibeaudiere, told journalists on Wednesday that he expected a robust economic performance for the current quarter, to end of June he gave no specific figure.

"Going forward, the bank is forecasting relatively strong economic growth for the June 2007 quarter, led by construction, mining and basic services, which include electricity generation, transportation and communication," Latibeaudiere said.

However, a slowdown in tourism would likely temper output.

"For the fiscal year 2007/2008, growth is expected to accelerate in the range of 2.5 to 3.5 per cent," the central bank governor said.

Higher than projection

Latibeaudiere's outlook for the real expansion of output was half a percentage point higher than the projection (three per cent) Finance Minister Omar Davies submitted to Parliament during his budget presentation and the figure being used by the International Monetary Fund (IMF) in its analyses of the Jamaican economy.

It was not immediately clear what additional drivers the central bank expects could come into play to add extra steam to the economy, but Latibeaudiere's projects come hard on the heels of the publication by the IMF of its downward revision of the growth figure for the last fiscal year.

Davies had told Parliament if his ministry's project of a 2.9 per cent growth for the 2006/2007 fiscal year which ended on March 31 - the same figure used by IMF staff members in their initial report on the Fund's Article IV consultation on the Jamaican economy.

But in a April 20 supplementary document to their report, the Fund staffers said there had been a slow-down in growth momentum towards the end of last year with the weakening of manufacturing activity and lower tourism arrivals in the first quarter of this year year.

"Real economic growth for FY2006/2007 may, therefore, be somewhat lower than the three per cent expected earlier," the IMF said.

Latibaudiere in his presentation said that growth for the fiscal year was "around 2.5 per cent".

He acknowledged a falloff in tourism arrivals during this year's first quarter, but argued this had to be placed in the context of the extraordinary growth in 2006 when some competing destinations, particularly Cancun, were out of commission while being rebuilt from hurricane damage.

Mild winter

A mild winter in North America, a new U.S. passport regime that requires American citizens travelling by air in Latin America and the Caribbean to have passports had contributed to the slowdown.

"If we discount 2006 as an unusual year, we will notice that stopover arrivals in 2007 so far are 11 per cent above what they were in 2005, a relatively normal year," Latibeaudiere said. "When this is compared to the long-term growth trend of an average three per cent, the bank is of the view that the industry continues to do well."

business@gleanerjm.com