Jamaica Braces for Economic Contraction of 11-13% After Hurricane Melissa

Jamaica is set to experience a significant economic contraction of between 11% and 13% in the fourth quarter of 2025 due to the devastating effects of Hurricane Melissa. This forecast was shared by the Planning Institute of Jamaica (PIOJ) during a press briefing on Tuesday, highlighting the severe impact on critical industries across the nation.

The PIOJ announced that the entire fiscal year of 2025/2026 could see a contraction ranging from 3% to 6%. Prior to the hurricane, the Jamaican economy had been projected to grow by 3.1% in the first half of the current fiscal year, with expectations of continued growth into the second half. Director General Dr. Wayne Henry remarked that the economy was on a promising growth trajectory before the storm struck.

Hurricane Melissa’s Impact on Key Sectors

Hurricane Melissa, classified as a Category 5 storm, caused extensive damage to infrastructure, including homes, power grids, roads, and water systems. Agriculture emerged as one of the most affected sectors. Dr. Henry noted that the seven parishes suffering the most damage account for 74% of land used for domestic crop production, alongside significant losses in livestock and fishing industries.

The storm devastated access roads, farmland, and equipment essential for agricultural production. Dr. Henry warned that the projected economic performance for the October to December 2025 period could be the worst since the economic downturn caused by the COVID-19 pandemic in the second quarter of 2020.

Looking Ahead: Recovery and Growth Prospects

Despite the bleak short-term outlook, there is cautious optimism regarding Jamaica’s recovery. Dr. Henry expressed confidence that the economy is expected to rebound, with a projected return to growth in the final quarter of 2026. He emphasized that ongoing repair and reconstruction efforts will play a critical role in revitalizing the economy.

As the nation navigates the aftermath of Hurricane Melissa, the focus will be on restoring essential services and rebuilding affected sectors. The resilience of the Jamaican economy will be tested in the coming months, but officials remain hopeful for a turnaround as recovery initiatives gain momentum.