Thu | Sep 20, 2018

Budget jump explained

Published:Wednesday | January 20, 2016 | 8:30 AM

The buy-back of Jamaica’s PetroCaribe debt is chiefly responsible for a $166.8 billion increase that has been proposed for the national budget.

The First Supplementary Estimates, tabled in the House of Representatives yesterday, shows that the Government intends to increase spending this fiscal year way beyond the $641.6 billion approved in March.

The estimates, which will be sent to the Public Administration and Appropriations Committee (PAAC), show that expenditure this fiscal year is to move to $808.4 billion.

The House of Representatives in March approved 9.7 billion dollar for contingency for liability management by the finance ministry.

The figure is to be increased by $176 billion to $185.8 billion.

Overall capital spending is to move from $209 billion to $378.5 billion while the recurrent budget is to fall from $432.6 billion to $429.9 billion.

The PAAC will have the deliberations in the estimates today and prepare a report in time for them to be debated in the House next week.

The Government last August completed a transaction with the Government of Venezuela to buy a portion of the debt owed under the PetroCaribe Energy Cooperation Agreement, using a portion of the proceeds from the most recent capital market issuance.

The arrangement with Venezuela allowed the Government of Jamaica to purchase the PetroCaribe debt for US$1.5 billion.