Jamaica Faces Economic Contraction of 11-13% After Hurricane Melissa

Jamaica is bracing for a significant economic downturn as the impact of Hurricane Melissa leads to a projected contraction of between 11% and 13% in the fourth quarter of 2025. This forecast, presented on November 25, 2025, by the Planning Institute of Jamaica (PIOJ), indicates that the country is facing its most severe quarterly economic decline in years. The broader economic outlook for the entire 2025/2026 fiscal year also appears grim, with expectations for a contraction of between 3% and 6%.

At a hybrid press briefing, Dr. Wayne Henry, Director General of the PIOJ, explained that prior to the hurricane’s arrival, Jamaica’s economy was on a growth trajectory. “Growth of 3.1% was estimated for the first half of the current fiscal year, and this was expected to continue throughout the second half,” stated Dr. Henry. The devastation caused by Hurricane Melissa, classified as a Category 5 storm, has disrupted this positive trend, compelling officials to reassess economic projections.

Widespread Damage Across Key Sectors

The hurricane wreaked havoc across multiple sectors, inflicting extensive damage to vital infrastructure including homes, power grids, roads, and water systems. Agriculture has emerged as one of the most adversely affected sectors. Dr. Henry highlighted that the seven parishes most impacted by the storm account for 74% of Jamaica’s land used for domestic crop production, alongside a significant portion of livestock and export crop farming.

The storm’s aftermath resulted in considerable losses, affecting access roads, farmland, livestock, and fishing gear. Dr. Henry cautioned that the October-December 2025 quarter could reflect Jamaica’s worst economic performance since the sharp decline experienced during the COVID-19 pandemic in April to June 2020.

Despite the grim outlook, Dr. Henry expressed cautious optimism regarding Jamaica’s recovery. He noted that the economy is expected to return to growth in the October-December 2026 quarter, driven by accelerated repair and reconstruction efforts.

As Jamaica navigates the challenges posed by Hurricane Melissa, the focus will shift to rebuilding and revitalizing critical sectors to restore economic stability. The path forward will require significant investment in infrastructure and support for the agricultural sector to mitigate future vulnerabilities.