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Finance Minister dismisses claims Petrocaribe money will fund election activities

Published:Monday | August 10, 2015 | 8:58 PMEdmond Campbell, Staff Reporter
Phillips ... the recent Petrocaribe debt-buy back will positively impact the government’s economic programme

Finance Minister Dr Peter Phillips has dismissed assertions by the Opposition that the government is planning to use money from the Petrocaribe Development Fund to finance election activities.

Speaking at a press conference this morning, Phillips said the government will not divert from fiscal prudence under its economic programme.

He said the recent Petrocaribe debt-buy back will positively impact the government’s economic programme.

According to Phillips, the timing of the transaction allowed Jamaica to minimise any impact on funding costs related to the forecast interest increases by the United States Federal Reserves later this year.

Last month, Jamaica raised about $2 billion from two bonds it issued on the international capital markets.

The Opposition has attacked the decision arguing that taxpayers will be burdened with repayments of millions of dollars a year because the government raised money at high interest rates to clear a debt that had an interest rate of just under two per cent interest.

READ: Holness says Petrocaribe debt buyback poses cash-flow threat

The Opposition spokesman on Finance, Audley Shaw has also argued that the government has not revealed all the details surrounding the deal.

The government has maintained that the deal will improve cash flow in the economy and reduce Jamaica's debt stock which could mean a relaxation of the measures under the country's agreement with the International Monetary Fund.