Thu | Mar 23, 2017

Phillips seeks permission from International Monetary Fund

Published:Wednesday | March 4, 2015 | 3:00 AM

Jamaica is seeking permission from the International Monetary Fund (IMF) to extend by one year the target for reducing the public sector wage bill.

The country had agreed with the IMF that the wage bill would be lowered to nine per cent of gross domestic product (GDP) by March 2016. Laws were also passed by the Parliament making the target hard-wired.

But Dr Peter Phillips, the minister of finance, said in Parliament yesterday that he intends to take a bill to Parliament to amend the fiscal rules to allow for the extension. He also said discussions are taking place with the IMF to allow for the adjustment.

"This adjustment takes account of the fact that close to $25 billion has been spent meeting an overhang of obligations inherited by the current administration and extended many years... .," Phillips said.

The extension of the wage target comes as the Government seeks to negotiate a new wage agreement with public sector workers who have endured a wage freeze for several years.

"It will require a concurrence and understanding on the part of the public sector unions and the general populace," Phillips said.

Wages as a percentage of GDP is currently estimated at 10.1 per cent for 2014/15 and is projected to fall to nine per cent by March 2017. The target has set out in the fiscal rules is nine per cent by March 2016.

"We have extended that target of nine per cent, subject to the concurrence of the Parliament when we bring the amendment to the law," the minister said.

- DL.