The economy of Jamaica is heavily reliant on services, accounting for 71% of the country's GDP.

Jamaica Jamaica is an island country in the Caribbean Sea and the West Indies. At , it is the third-largest island—after Cuba and Hispaniola—of the Greater Antilles and the Caribbean. Jamaica lies about south of Cuba, west of Hispaniola (the is ...

has natural resources and a 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. Weakness in the financial sector, speculation, and lower levels of investment erode confidence in the productive sector. The government continues its efforts to raise new sovereign debt in local and international financial markets 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. The Jamaican government's economic policies encourage foreign investment in areas that earn or save foreign exchange, generate employment, and use local raw materials. The government also provides a wide range of incentives to investors. 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. The Government of Jamaica hopes to encourage economic activity through a combination of privatisation, financial sector restructuring, reduced interest rates, and by boosting tourism and related productive activities.

Economic history

Before independence, Jamaica's economy was largely focused on agriculture with the vast majority of the labour force engaged in the production of sugar, bananas, and tobacco. According to one study, 18th century Jamaica had the highest wealth inequality in the world, as a very small, slave-owning elite was extremely wealthy while the rest of the population lived on the edge of subsistence. These products were mainly exported to the United Kingdom, Canada, and to the United States of America. Jamaica's trade relationships expanded substantially from 1938 to 1946, with total imports almost doubling from £6,485,000 to £12,452,000. After 1962, the Jamaican government pushed for economic growth and all sectors excluding bauxite/alumina, energy, and tourism had shrunk between 1998 and 1999. In 2000, Jamaica experienced its first year of positive growth since 1995 due to continued tight macroeconomic policies. Inflation fell from 25% in 1995 to single digits in 2000, reaching a multidecade low of 4.3% in 2004. Through periodic intervention in the market, the central bank also has prevented any abrupt drop in the exchange rate. The Jamaican dollar has been slipping, despite intervention, resulting in an average exchange rate of J$73.40 per US$1.00 and J136.2 per €1.00 (February 2011). In addition, inflation has been trending upward since 2004 and is projected to once again reach a double digit rate of 12–13% through the year 2008 due to a combination of unfavorable weather damaging crops and increasing agricultural imports and high energy prices. Over the last 30 years, real per capita GDP increased at an average of just one per cent per year, making Jamaica one of the slowest growing developing countries in the world. To reverse this trajectory, the Government of Jamaica embarked on a comprehensive and ambitious program of reforms for which it has garnered national and international support: a four-year Extended Fund Facility (EFF) by the

International Monetary Fund The International Monetary Fund (IMF) is a major financial agency of the United Nations, and an international financial institution funded by 191 member countries, with headquarters in Washington, D.C. It is regarded as the global lender of las ...

(IMF) providing a support package of US$932 million; World Bank Group and the Inter-American Development Bank (IDB) programs providing US$510 million each to facilitate the GoJ's economic reform agenda to stabilise the economy, reduce debt and create the conditions for growth and resilience.. In addition, the International Finance Corporation (IFC) and Multilateral Investment Guarantee Agency (MIGA) will continue to support private sector development. The reform program is beginning to bear fruit: Institutional reforms and measures to improve the environment for the private sector have started to restore confidence in the Jamaican economy. Jamaica jumped 27 places to 58 among 189 economies worldwide in the 2015 Doing Business ranking, the country's credit rating has improved and the Government has successfully raised more than US$2 billion in the international capital in the markets in 2014 and 2015.. Despite some revival, economic growth is still low: the Jamaican Government is forecasting real gross domestic product (GDP) growth of 1.9 per cent for the fiscal year 2015/2016 and the country continues to be confronted by serious social issues that predominantly affect youth, such as high levels of crime and violence and high unemployment. Jamaica, which had seen its poverty rate drop almost 20 per cent over two decades, saw it increase by eight per cent in a few years. The unemployment rate in Jamaica is approximately 6.0% (April 2022, Statistical Institute of Jamaica), with youth unemployment more than twice the national rate, albeit trending downwards (15%). However, among Jamaica's assets are its skilled labour force and strong social and governance indicators.

Primary industries

Agriculture

Agricultural production is an important contributor to Jamaica's economy. However, it is vulnerable to extreme weather, such as

hurricane A tropical cyclone is a rapidly rotating storm system with a low-pressure area, a closed low-level atmospheric circulation, strong winds, and a spiral arrangement of thunderstorms that produce heavy rain and squalls. Depending on its ...

s and to competition from neighbouring countries such as the USA. Other difficulties faced by farmers include thefts from the farm, known as

praedial larceny Praedial larceny is the theft of agricultural produce. While such theft is almost universal, this term is primarily used in the Caribbean region where it is widely acknowledged to be a practice negatively impacting development of agriculture. The ...

. Agricultural production accounted for 7.4% of GDP in 1997, providing employment for nearly a quarter of the country. Jamaica's agriculture, together with forestry and fishing, accounted for about 6.6% of GDP in 1999. Sugar has been produced in Jamaica for centuries, it is the nation's dominant agricultural export. Sugar is produced in nearly every parish. The production of raw sugar in the year 2000 was estimated at 175,000 tons, a decrease from 290,000 tons in 1978. Jamaican agriculture has been less prominent in GDP in the 2000s than other industries, hitting an all-time low between 2004 and 2008. This may have been due to a reaction to increased competition as international trade policies were enacted. For example, as NAFTA was enacted in 1993, a significant amount of Caribbean exports to the United States diminished, being out competed by Latin American exports. Another example is the Banana Import Regime's 3rd phase, in which EU nations had first given priority in banana imports to previously colonised nations. Under pressure by the World Trade Organization, the EU policy was altered to provide a non-discriminatory trade agreement. Jamaica's banana industry was easily outpriced by American companies exporting Latin American goods. Jamaica's agriculture industry is now bouncing back, growing from being 6.6% of GDP to 7.2%. Sugar formed 7.1% of the exports in 1999 and Jamaica made up about 4.8% of the total production of sugar in the Caribbean. Sugar is also used for the production of by-products such as molasses, rum and some wallboard is made from

bagasse Bagasse ( ) is the dry pulpy fibrous material that remains after crushing sugarcane or sorghum stalks to extract their juice. It is used as a biofuel for the production of heat, energy, and electricity, and in the manufacture of pulp and building ...

Banana A banana is an elongated, edible fruit – botanically a berry – produced by several kinds of large treelike herbaceous flowering plants in the genus '' Musa''. In some countries, cooking bananas are called plantains, distinguishing the ...

production in 1999 was 130,000 tons. Bananas formed 2.4% of the exports in 1999 and Jamaica formed around 7.5% of the total production of banana in the Caribbean. Jamaica stopped exporting banana in 2008 after suffering from several years of hurricanes that devastated the plantations. Coffee is mainly grown around the Blue Mountains and in hilly areas. One type in particular,

Jamaican Blue Mountain Coffee Jamaican Blue Mountain Coffee or Jamaica Blue Mountain Coffee is a classification of coffee grown in the Blue Mountains of Jamaica. The coffee was introduced to Jamaica in 1728. Jamaican Blue Mountain Coffee is an Arabica coffee-bean variety ca ...

, is considered among the best in the world because at those heights in the Blue Mountains, the cooler climate causes the berries to take longer to ripen and the beans develop more of the substances which on roasting give coffee its flavor. Coffee formed 1.9% of exports in 1999. The picking season lasts from August to March. The coffee is exported from

Kingston Kingston may refer to: Places * List of places called Kingston, including the six most populated: ** Kingston, Jamaica ** Kingston upon Hull, England ** City of Kingston, Victoria, Australia ** Kingston, Ontario, Canada ** Kingston upon Thames, ...

. Cocoa is grown throughout Jamaica and local sales absorb about 1/3 of the output to be made into instant drinks and confectionery.

Citrus fruit ''Citrus'' is a genus of flowering plant, flowering trees and shrubs in the family Rutaceae. Plants in the genus produce citrus fruits, including important crops such as Orange (fruit), oranges, Mandarin orange, mandarins, lemons, grapefruits, ...

is mainly grown in the central parts of Jamaica, particularly between the elevations of 1,000–2,500 feet. The picking season lasts from November to April. Two factories in

Bog Walk Bog Walk is a town in the parish of Saint Catherine, Jamaica. In 1898 work started on a hydroelectric power plant on the Rio Cobre near Bog Walk. The plant (1,500 H.P.) was completed the next year and used to power Kingston Kingston may ref ...

produce fruit juices, canned fruit, essential oils and

marmalade Marmalade (from the Portuguese ''marmelada'') is a fruit preserves, fruit preserve made from the juice and peel of citrus fruits boiled with sugar and water. The well-known version is made from bitter orange. It also has been made from lemons ...

Coconut The coconut tree (''Cocos nucifera'') is a member of the palm tree family (biology), family (Arecaceae) and the only living species of the genus ''Cocos''. The term "coconut" (or the archaic "cocoanut") can refer to the whole coconut palm, ...

s are grown on the northern and eastern coasts, which provide enough

copra Copra (from ; ; ; ) is the dried, white flesh of the coconut from which coconut oil is extracted. Traditionally, the coconuts are sun-dried, especially for export, before the oil, also known as copra oil, is pressed out. The oil extracted ...

to supply factories to make butterine,

margarine Margarine (, also , ) is a Spread (food), spread used for flavoring, baking, and cooking. It is most often used as a substitute for butter. Although originally made from animal fats, most margarine consumed today is made from vegetable oil. The ...

lard Lard is a Quasi-solid, semi-solid white fat product obtained by rendering (animal products), rendering the adipose tissue, fatty tissue of a domestic pig, pig.

, edible oil and laundry soap.

Vanilla Vanilla is a spice derived from orchids of the genus ''Vanilla (genus), Vanilla'', primarily obtained from pods of the flat-leaved vanilla (''Vanilla planifolia, V. planifolia''). ''Vanilla'' is not Autogamy, autogamous, so pollination ...

is also grown. Other export crops are

pimento A pimiento or pimento or cherry pepper is a variety of large, red, heart-shaped chili pepper (''Capsicum annuum'') that measures long and wide (medium, elongate). Description and habitat Pimientos can have various colors including yellow ...

ginger Ginger (''Zingiber officinale'') is a flowering plant whose rhizome, ginger root or ginger, is widely used as a spice and a folk medicine. It is an herbaceous perennial that grows annual pseudostems (false stems made of the rolled bases of l ...

, tobacco,

sisal Sisal (, ; ''Agave sisalana'') is a species of flowering plant native to southern Mexico, but widely cultivated and naturalized in many other countries. It yields a stiff fibre used in making rope and various other products. The sisal fiber is ...

and other fruit are exported. Rice is grown around swampy areas around the Black River & around Long Bay in Hanover and Westmoreland parishes for local consumption. As tastes have changed in Jamaica in favour of more meat and

packaged food Convenience food (also called tertiary processed food) is food that is commercially prepared (often through processing) for ease of consumption, and is usually ready to eat without further preparation. It may also be easily portable, have ...

the national food import bill has grown to the point that it threatens the health of the economy. The government has responded by encouraging gardening and farming, a response which has had limited success. For example, the percentage of potatoes grown locally has increased, but imports of french fries have continued at a high level.

Animal husbandry

Pastures form a good percentage of the land in Jamaica. Many properties specialise in cattle rearing. Livestock holdings include 400,000 head of cattle, 440,000 goats and 180,000 pigs. Dairying has increased since the erection of a

condensed milk Condensed milk is Milk#Cow, cow's milk from which water has been removed (roughly 60% of it). It is most often found with sugar added, in the form of sweetened condensed milk, to the extent that the terms "condensed milk" and "sweetened condensed m ...

factory at Bog Walk in 1940. Even so, the supply of dairy products is not enough for local requirements and there are large imports of

powdered milk Powdered milk, also called milk powder, dried milk, or dry milk, is a manufactured dairy product made by evaporating milk to dryness. One purpose of drying milk is to preserve it; milk powder has a far longer shelf life than liquid milk and do ...

, butter and cheese.

Fishing

The

fishing industry The fishing industry includes any industry or activity that takes, cultures, processes, preserves, stores, transports, markets or sells fish or fish products. It is defined by the Food and Agriculture Organization as including recreational, sub ...

grew during the 1900s, primarily from the focus on inland fishing. Several thousand fishermen make a living from fishing. The shallow waters and cays off the south coast are richer than the northern waters. Other fishermen live on the Pedro Cays, to the south of Jamaica. Jamaica supplies about half of its fish requirements; major imports of frozen and salted fish are imported from the United States and Canada. The total catch in 2000 was 5,676 tons, a decrease from 11,458 tons in 1997; the catch was mainly marine, with freshwater

carp The term carp (: carp) is a generic common name for numerous species of freshwater fish from the family (biology), family Cyprinidae, a very large clade of ray-finned fish mostly native to Eurasia. While carp are prized game fish, quarries and a ...

barbel Barbel may refer to: *Barbel (anatomy), a whisker-like organ near the mouth found in some fish (notably catfish, loaches and cyprinids) and turtles *Barbel (fish), a common name for certain species of fish **''Barbus barbus'', a species of cyprini ...

, etc., crustaceans & molluscs.

Forestry

By the late 1890, only of Jamaica's original of forest remained. Roundwood production was 881,000 cu m (31.1 million cu ft) in 2000. About 68% of the timber cut in 2000 was used as fuel wood while 32% was used for industrial use. The forests that once covered Jamaica now exist only in mountainous areas. They only supply 20% of the island timber requirements. The remaining forest is protected from further exploitation. Other accessible mountain areas are being reforested, mainly with

pine A pine is any conifer tree or shrub in the genus ''Pinus'' () of the family Pinaceae. ''Pinus'' is the sole genus in the subfamily Pinoideae. ''World Flora Online'' accepts 134 species-rank taxa (119 species and 15 nothospecies) of pines as cu ...

s, mahoe and

mahogany Mahogany is a straight- grained, reddish-brown timber of three tropical hardwood species of the genus ''Swietenia'', indigenous to the AmericasBridgewater, Samuel (2012). ''A Natural History of Belize: Inside the Maya Forest''. Austin: Universit ...

Mining

Jamaica was the third-leading producer of

bauxite Bauxite () is a sedimentary rock with a relatively high aluminium content. It is the world's main source of aluminium and gallium. Bauxite consists mostly of the aluminium minerals gibbsite (), boehmite (γ-AlO(OH)), and diaspore (α-AlO(OH) ...

and

alumina Aluminium oxide (or aluminium(III) oxide) is a chemical compound of aluminium and oxygen with the chemical formula . It is the most commonly occurring of several aluminium oxides, and specifically identified as aluminium oxide. It is commonly ...

in 1998, producing 12.6 million tons of bauxite, accounting for 10.4% of world production, and 3.46 million tons of alumina, accounting for 7.4% of world production. 8,540 million tons of bauxite was mined in 2012 and 10,200 million tons of bauxite in 2011. Mining and quarrying made up 4.1% of the nation's gross domestic product in 1999. Bauxite and alumina formed 55.2% of exports in 1999 and are the second-leading money earner after tourism. Jamaica has reserves of over 2 billion tonnes, which are expected to last 100 years. Bauxite is found in the central parishes of St. Elizabeth, Manchester, Clarendon, St. Catherine, St. Ann, and Trelawny. There are four alumina plants and six mines. Jamaica has deposits of several million tons of

gypsum Gypsum is a soft sulfate mineral composed of calcium sulfate Hydrate, dihydrate, with the chemical formula . It is widely mined and is used as a fertilizer and as the main constituent in many forms of plaster, drywall and blackboard or sidewalk ...

on the southern slopes of the Blue Mountains. Jamaica produced 330,441 tons of gypsum in the year 2000, some of which was used in the local cement industry and in the manufacturing of building materials. Other minerals present in Jamaica include

marble Marble is a metamorphic rock consisting of carbonate minerals (most commonly calcite (CaCO3) or Dolomite (mineral), dolomite (CaMg(CO3)2) that have recrystallized under the influence of heat and pressure. It has a crystalline texture, and is ty ...

limestone Limestone is a type of carbonate rock, carbonate sedimentary rock which is the main source of the material Lime (material), lime. It is composed mostly of the minerals calcite and aragonite, which are different Polymorphism (materials science) ...

, and

silica Silicon dioxide, also known as silica, is an oxide of silicon with the chemical formula , commonly found in nature as quartz. In many parts of the world, silica is the major constituent of sand. Silica is one of the most complex and abundant f ...

, as well as

ore Ore is natural rock or sediment that contains one or more valuable minerals, typically including metals, concentrated above background levels, and that is economically viable to mine and process. The grade of ore refers to the concentration ...

s of copper, lead,

zinc Zinc is a chemical element; it has symbol Zn and atomic number 30. It is a slightly brittle metal at room temperature and has a shiny-greyish appearance when oxidation is removed. It is the first element in group 12 (IIB) of the periodic tabl ...

manganese Manganese is a chemical element; it has Symbol (chemistry), symbol Mn and atomic number 25. It is a hard, brittle, silvery metal, often found in minerals in combination with iron. Manganese was first isolated in the 1770s. It is a transition m ...

and iron. Some of these are worked in small quantities. Petroleum has been sought, but so far none has been found.

Secondary Industries

Manufacturing

The manufacturing sector is an essential contributor to the Jamaican economy. Though manufacturing accounted for 13.9% of GDP in 1999. Jamaican companies contribute many manufactures such as food processing;

oil refining An oil refinery or petroleum refinery is an industrial processes, industrial process Factory, plant where petroleum (crude oil) is transformed and refining, refined into products such as gasoline (petrol), diesel fuel, Bitumen, asphalt base, ...

; produced

chemical A chemical substance is a unique form of matter with constant chemical composition and characteristic properties. Chemical substances may take the form of a single element or chemical compounds. If two or more chemical substances can be combin ...

s, construction materials, plastic goods,

paint Paint is a material or mixture that, when applied to a solid material and allowed to dry, adds a film-like layer. As art, this is used to create an image or images known as a painting. Paint can be made in many colors and types. Most paints are ...

pharmaceutical Medication (also called medicament, medicine, pharmaceutical drug, medicinal product, medicinal drug or simply drug) is a drug used to diagnose, cure, treat, or prevent disease. Drug therapy ( pharmacotherapy) is an important part of the ...

carton A carton is a box or container usually made of liquid packaging board, paperboard and sometimes of corrugated fiberboard. Many types of cartons are used in packaging. Sometimes a carton is also called a box. Types of cartons Folding cartons ...

s, leather goods and cigars & assembled

electronics Electronics is a scientific and engineering discipline that studies and applies the principles of physics to design, create, and operate devices that manipulate electrons and other Electric charge, electrically charged particles. It is a subfield ...

, textiles and

apparel Clothing (also known as clothes, garments, dress, apparel, or attire) is any item worn on a human human body, body. Typically, clothing is made of fabrics or textiles, but over time it has included garments made from animal skin and other thin s ...

. The garment industry is a major job employer for thousands of hundreds of locals and they formed 12.9% of exports in 1999 earning US$159 million. Chemicals formed 3.3% of the exports in 1999 earning US$40 million. A portion of the bauxite mined on the island is processed into alumina before export. An oil refinery is located near Kingston converts crude petroleum obtained from

Venezuela Venezuela, officially the Bolivarian Republic of Venezuela, is a country on the northern coast of South America, consisting of a continental landmass and many Federal Dependencies of Venezuela, islands and islets in the Caribbean Sea. It com ...

into gasoline and other products. These are mainly for local use. The construction industry is growing due to new hotels and attractions being built for tourism. Construction and installation formed 10.4% of the GDP in 1999. Manufactured goods were imported and formed 30.3% of the imports and cost US$877 million in 1999. Since the launch of the Jamaican Logistics Hub initiative, various economic zones have been proposed throughout the country to assemble goods from other parts of the world for distribution to the Americas.

Tertiary industries

Tourism

Tourism is tied with remittances as Jamaica's top source of revenue. The tourism industry earns over 50 per cent of the country's total foreign exchange earnings and provides about one-fourth of all jobs in Jamaica. Most tourist activity is centered on the island's northern coast, including the communities of

Montego Bay Montego Bay () is the capital of the Parishes of Jamaica, parish of Saint James Parish, Jamaica, St. James in Jamaica. The city is the fourth most populous urban area in the country, after Kingston, Jamaica, Kingston, Spanish Town, and Portmore ...

Ocho Rios Ocho Rios (Spanish for "Eight Rivers") () is a town in the parish of Saint Ann on the north coast of Jamaica, and is more widely referred to as ''Ochi'' by locals. Beginning as a sleepy fishing village, Ocho Rios has seen explosive growth ...

, and

Port Antonio Port Antonio () is the capital of the parish of Portland on the northeastern coast of Jamaica, about from Kingston. It had a population of 12,285 in 1982 and 13,246 in 1991. It is the island's third largest port, famous as a shipping point for ...

, as well as in

Negril Negril is a small, widely dispersed beach resort and town located in Westmoreland and Hanover parishes at the far western part of Jamaica, southwest from Sangster International Airport in Montego Bay. Westmoreland is the westernmost paris ...

on the island's western tip. KFC 20221018 154801

Some destinations include Ocho Rios, Green Grotto Caves, Y.S. Falls and Appleton Estate. Most of the tourist sites are landmarks as well as homes for many Jamaicans. Many of the most frequented tourist sites are located mainly by water such as rivers and beaches where fishermen make a living from seafood. One of the most famous beach towns in Jamaica is Ocho Rios, a located in the parish of Saint Ann on the north coast of Jamaica. It was once a fishing village but now attracts millions of tourists yearly. The site is popular today because of the food and culture that can be found there. Another famous location in Jamaica that attracts millions yearly is

Dunn's River Falls Dunn's River Falls is a famous waterfall near Ocho Rios, Jamaica. Appearance At about high and long, the waterfalls are naturally terraced like giant natural stairs. Several small lagoons are interspersed among the vertical sections of the fal ...

, located in Ocho Rios; this waterfall is approximately 600 feet long and runs off into the sea. Around the location many hotels and restaurants are available and many street vendors sell food around the clock. Another well-known beach town is Negril, the party capital of the country. This beach town has many different factors to add to the night life.

Logistics

In April 2014, the Governments of Jamaica and China signed the preliminary agreements for the first phase of the Jamaican Logistics Hub (JLH) – the initiative that aims to position

as the fourth node in the global logistics chain, joining

Rotterdam Rotterdam ( , ; ; ) is the second-largest List of cities in the Netherlands by province, city in the Netherlands after the national capital of Amsterdam. It is in the Provinces of the Netherlands, province of South Holland, part of the North S ...

Dubai Dubai (Help:IPA/English, /duːˈbaɪ/ Help:Pronunciation respelling key, ''doo-BYE''; Modern Standard Arabic, Modern Standard Arabic: ; Emirati Arabic, Emirati Arabic: , Romanization of Arabic, romanized: Help:IPA/English, /diˈbej/) is the Lis ...

and Singapore, and serving the Americas. The Project, when completed, is expected to provide many jobs for Jamaicans, Economic Zones for multinational companies and much needed economic growth to alleviate the country's heavy

debt-to-GDP ratio In economics, the debt-to-GDP ratio is the ratio of a country's accumulation of government debt (measured in units of currency) to its gross domestic product (GDP) (measured in units of currency per year). A low debt-to-GDP ratio indicates that an ...

. Strict adherence to the IMF's refinancing programme and preparations for the JLH has favourably affected Jamaica's credit rating and outlook from the three biggest rating agencies.

ICT/BPO

Jamaica has made strides in developing its Information and Communications Technology (ICT) infrastructure. As the largest English speaking territory in the Caribbean, Jamaica is the region's leading contact centre location with over 87 information communications technology/business process outsourcing (ICT/BPO) companies operating in the country employing 44,000 full-time agents.

Taxation/Tax Rates

Jamaican tax rates are extremely favourable in world standards, the brackets are as follows: Separate Tax Rates apply for foreign nationals.

Economic Data

The following table shows the main economic indicators in 1980–2024. Inflation below 5% is in green.

References

External links

World Bank Trade Summary Statistics Jamaica 2012

Partners in Austerity: Jamaica, the United States and the International Monetary Fund
from the

Center for Economic and Policy Research The Center for Economic and Policy Research (CEPR) is an American think tank that specializes in economic policy. Based in Washington, D.C. CEPR was co-founded by economists Dean Baker and Mark Weisbrot in 1999. Considered a left-leaning orga ...

, April 2015 {{DEFAULTSORT:Economy Of Jamaica