KINGSTON, Jamaica — Jamaica’s parliament has authorized a temporary suspension of the nation’s Fiscal Rules following an official determination that Hurricane Melissa caused economic damage exceeding legislative thresholds. The decision came after Finance Minister Fayval Williams presented data to the House of Representatives on Tuesday showing the storm’s impact reached at least 1.5% of GDP, triggering provisions under Jamaican law that allow for fiscal flexibility during national emergencies.
The Independent Fiscal Commission received comprehensive assessments from multiple government entities including the Planning Institute of Jamaica, Bank of Jamaica, and the Finance Ministry, all confirming the hurricane’s severe economic consequences. Minister Williams revealed that the total fiscal impact is projected to reach 5.3% of GDP over the period spanning fiscal years 2025/2026 through 2029/2030, significantly surpassing the 1.5% legislative threshold required for suspension.
The approved Order grants the Administration necessary fiscal space for recovery and reconstruction efforts during the 2025-26 fiscal year. The suspension initially covers a one-year period, with provisions allowing the finance ministry to seek parliamentary approval for extensions if warranted by ongoing recovery needs.
Economic projections have been substantially revised downward, with real GDP now expected to decline by 4.3% for fiscal year 2025/26—a dramatic reversal from the 2.2% growth forecast presented in February’s Fiscal Policy Paper. Medium-term projections indicate a gradual recovery with real GDP growth averaging between 1-2% as the economy rebounds from the current contraction.
Despite the economic challenges, officials anticipate inflation will stabilize within the Bank of Jamaica’s target range of 4-6%, providing some macroeconomic stability during the recovery period.