KINGSTON,- Jamaica's economy remained in recession in the first quarter of 2013, and it was predicted to be stable in the second, according to statistics released Thursday by the country's central bank.The Bank of Jamaica (BOJ) estimated that the economy contracted in a range of 1.2 percent to 0.2 percent in the first quarter this year. But conditions are expected to improve in the second quarter as growth rate is forecast to be flat in a range of negative 0.5 percent to positive 0.5 percent.
"The outturn for the first quarter reflected the impact of drought conditions as well as weak domestic and external demand," BOJ governor Brain Wynter told a press conference.
"Continued uncertainty about the prospects for the economy had a debilitating impact on investments and economic activity in general," he added.
However, the country's economy is expected to improve when spinoff from the recent approval of an Extended Fund Facility by the International Monetary Fund (IMF) will begin yielding positive results later this year, said Wynter.
The IMF approved a four-year loan plan of 932 million U.S. dollars for Jamaica earlier this month as part of a 2-billion-dollar loan package from multilaterals such as the World Bank and the Inter-American Development Bank.
"It is projected that there will be a gradual improvement in real output in subsequent quarters resulting in growth in the range of 0.5 percent to 1.5 percent for 2013/14 fiscal year," the head of the central bank said.
Meanwhile, inflation stayed within projections at 2.7 percent during the first quarter, according to the BOJ.
Inflation was driven mainly by price increases in agricultural products as a result of prevailing drought conditions and the depreciation of the local currency. The depreciation also had an impact on domestic food prices as well as the cost for importing crude oil for energy generation.
