Worsening fiscal deficit not due to general election spending — PIOJ
The Planning Institute of Jamaica (PIOJ) says the $8.3 billion in fiscal spending above budgeted levels in the December 2015 quarter was not due to spending ahead of the general election.
Jamaicans went to the polls on February 25 but the lead-up campaigns started last year.
The concern relates to whether the previous administration spent more during the quarter than they would normally in order to complete projects in a bid to appease voters.
"I do not know about that. What I do know is that the programme targets were met and the primary surplus targets were met at December," said PIOJ Director General Colin Bullock in response to a Financial Gleaner query at his quarterly press briefing on Thursday.
He said the targets set out by Jamaica's most prominent lender, the International Monetary Fund (IMF), were met.
"So the targets were met. I think that the IMF team was supposed to visit in February, but EPOC has also indicated that we met all of our performance targets at the end of December," he said.
At the briefing, the PIOJ reported that the fiscal deficit of $10.8 billion during the October to December 2015 quarter was $8.3 billion worse than budgeted. The planning agency explained that it was due to expenditure of $117 billion - excluding amortisation - being $10.3 billion above budget. Revenues and grants of $106.2 billion was $2 billion higher than programmed.
In August, the outgoing Finance and Planning Minister Dr Peter Phillips said the Government would not
overspend in the run-up to
general election to benefit constituents. Following the 2002 general election, then Finance Minister Dr Omar Davies became known for his 'run wid it' statement in which he admitted
to increasing spending on government projects.
PIOJ expects growth
The PIOJ indicated that the Jamaican economy should grow up to 1.5 per cent during the fiscal year ending March 2016. Contextually, the country grew by 0.8 per cent for the calendar year 2015 and 0.5 per cent in 2014.
"We expect real GDP for January to March quarter to grow in the range of 0.5 to 1.5 per cent, and the growth of the fiscal year is projected to fall within the range, also, of 0.5 to 1.5 per cent," he said.
During the quarter ending December 2015, tourist visitor expenditure totalled some US$579.4 million. Additionally, preliminary airport arrivals for January 2016 recorded a 2.9 per cent rise year-on-year, while cruise arrivals rose 11.4 per cent.
The short-term prospects of the Jamaican economy are positive based on the continued strength of productive activities in both the goods-producing and service industries. The return to growth is expected in mining and quarrying, agriculture and fisheries, while continued strengthening is expected for most other industries, Bullock said.
Jamaican registered deflation of 0.4 per cent in January, due mainly to reductions in crude oil prices translating to lower transport prices. Also, housing costs were down 1.4 per cent and there was an increased availability of food choices.
"In conclusion, we note that the economy has continued its slow but encouraging recovery with growth in both the goods-producing and service industries and with increased employment," said the PIOJ head, while noting that the country needs to grow faster.
"As we try to extract more output from traditional industries like tourism, mining and agriculture, there must be continued effort to realise Jamaica's potential to plug into global supply chains like business process outsourcing, information communication technology, animation, and the international movement and processing of goods through ports and special economic zones," Bullock said.