By Caribbean News Global contributor
KINGSTON, Jamaica, (CNG Business) – Dr Nigel Clarke, minister of finance and the public service, on Tuesday, January 19, tabled the third supplementary estimates for 2020-21, a $3.5 billion reduction in spending for the fiscal year, the Jamaica Information Service (JIS) reported. However, “the prospects of Jamaica rebounding from the economic fallout of the coronavirus (COVID-19) to record growth within the range of 3-8 percent, beginning fiscal year 2021-22 are “very realistic”, says Dr Clarke.
Speaking at Mayberry Investments Limited’s virtual investor forum on Wednesday, January 20, Dr Clarke explained: “As long as we can roll out our vaccine programme, beginning April 2021, and our markets to the north continue with their vaccine roll-out, I’m confident that the projections [3-8 percent, beginning fiscal year 2021-22] will absolutely be met”.
$3.5 billion budget cut
“The revised budget proposes a reduction in expenditure from $853.8 billion to $850.3 billion. The capital budget was reduced from $53.5 billion to $52 billion for the fiscal year, and the recurrent or housekeeping budget has been reduced from $800.3 billion to $798.3 billion.”
“The coronavirus (COVID-19) pandemic continues to impact the Jamaican economy,” Dr Clarke said. “As noted before, for the seven months to October 2020, revenues were slightly ahead of budget. However, by the end of December, that margin was erased and with great effort by the revenue administration team. Revenues were on target for the nine months ending December 2020.”
“The expectation is that revenues for this quarter will be affected by the prolonged nature of the pandemic. The significant adjustment in the growth rate translates to lower revenue than estimated for the second Supplementary Estimates, and therefore, the need for a downward adjustment of budgeted expenditure as we seek to ensure the maintenance of microeconomic stability,” he added.
Economy is poised to bounce back
President of Jamaica Promotions Corporation (JAMPRO), Diane Edwards, says Jamaica’s economy is poised to bounce back from the negative effects of the coronavirus (COVID-19) and should see growth by 2022.
“We are extremely optimistic about the future of Jamaica. We think that the position and location of Jamaica, on a direct line from the Panama Canal, gives us a real opportunity to become the primary logistics hub of the Caribbean.
“We see a huge interest now in agribusiness, and it is very interesting that in our business confidence index, which was just released January 19, agribusiness is going to be one of the big sectors of movement for the next few years to come, because food security is now on everybody’s lips,” she added. “Digital services [as well], because the digitisation of the economy is so critical, and everybody now knows that eCommerce has to play a role in any business and any delivery of service,” she said.
6.4 percent inflation
The Statistical Institute of Jamaica (STATIN) reported that the rate of inflation for December 2020 was 1.3 percent, while the out-turn for the calendar year was 6.4 percent.
Speaking at STATIN’s quarterly digital briefing on Wednesday, January 20, director-general, Carol Coy, advised that the movement in the December consumer price index (CPI) was attributable to increases in indices for the divisions – ‘Food and Alcoholic Beverages’, up 2.4 percent; ‘Housing, Water, Electricity, Gas and Other Fuels’, which increased by 1.5 percent; and ‘Transport’ that rose by 0.3 percent.
Coy indicated that the increase in ‘Food and Non-Alcoholic Beverages’ resulted from a 2.5 percent rise in the index for the group ‘Food’, consequent on higher prices for some vegetables.
“Higher rates for electricity, water and sewerage were the main contributors to the increase in the division ‘Housing Water, Electricity, Gas and Other Fuels’. The increase in the index for the ‘transport’ division was due mainly to higher petrol prices,” the director-general said.
Source: The Jamaica Information Service (JIS).