THE GLOBAL economic meltdown will continue to have an adverse effect on the Jamaican economy this year, according to Director General of the Planning Institute of Jamaica (PIOJ) Dr Wesley Hughes.

Hughes said prospects of the United States stimulus package positively impacting the country's economy any time soon looked dim.

He was speaking yesterday during the PIOJ's quarterly press briefing at the agency's offices on Oxford Road in New Kingston.

No improvement

The PIOJ head said there were no clear signs that US and Europe had made significant progress in their efforts to address the problems facing their banking system.

"Unless we get the banking system operating and credit flowing, the economic condition will not improve significantly. Credit to the economy is like blood to the human body," Hughes stressed.

He argued, however, that a recovery in the US economy would not immediately affect Jamaica, as the country lagged nine-12 months behind the US.

Reviewing Jamaica's economic performance for the October to December quarter, Hughes said real gross domestic product (GDP) fell by about 0.7 per cent relative to the corresponding period in 2007.

For the period under review, the goods-producing sectors declined by 2.6 per cent, while the services industries were flat.

The main contributor to the decline in the goods-producing sectors was construction, recording an 11 per cent reduction. All other industries in this category recorded growth with agriculture, forestry and fishing up by 7.5 per cent. Mining and quarrying grew by three per cent, while manufacturing registered 0.1 per cent growth.

Real value added for calendar year 2008 was estimated at -0.4 per cent.

The fiscal deficit for the review quarter was $32.8 billion. This was $13.9 billion more than budgeted.