The latest numbers from global macroeconomic analysts BMI predict that Jamaica’s economy will contract by 1.8% over the course of 2026.
That’s an improvement from its previous estimate of a 2.3% contraction, with the recovery being led by a stronger performance in the fourth quarter of 2026. One reason Jamaica’s economy will grow in the fourth quarter of 2026, is that it will be compared to the same quarter the previous year, which is when Hurricane Melissa hit.
BMI, which is owned by Fitch Solutions, estimates that Jamaica’s economy saw a quarterly contraction of 7.1% in the fourth quarter of 2025. Another reason that Jamaica is expected to recover more quickly than expected is that unemployment remains relatively low at 3.6% in the first quarter of 2026.
The economy is also benefiting from the Bank of Jamaica’s decision to ease monetary policy in February, which coincides with increased fiscal stimulus from the government. BMI doesn’t just wait for the official GDP numbers from the government or central bank, which inherently lag the economic activity they are recording.
It also uses “higher-frequency indicators” that give real-time insight into how the economy is performing. Some of those numbers still show a fragile economy.
For example, its production of bauxite – a key feedstock for aluminium – is down 33.8% year-on-year, while airport arrivals have dropped 36%. While Jamaica’s economy is recovering from Hurricane Melissa, it will be vulnerable to further external shocks. With hurricane season approaching, another direct hit from a major storm would set back Jamaica’s recovery.
The island is also vulnerable to the ongoing impact of the geopolitical storm in the Middle East, namely through the impact of higher energy prices and borrowing costs.
