Consumers limit purchase plans - survey
The fiscal discipline engendered by the economic reform programme under the International Monetary Fund (IMF) appears to have taken root among ordinary Jamaicans.
The latest data from the Survey of Consumer and Business Confidence for the first quarter of 2016 shows that there has been negligible change in the purchase plans of consumers, a trend which pollster Don Anderson has suggested could be attributed to the austerity of the IMF programme.
Addressing questions about a possible link between the IMF programme and the slowdown in purchase intent, Anderson said, "I am sure that is part of it, and we are going to plot this some more because it is the first we are seeing this kind of pattern emerging where despite the expectation at the level that they are there has not been that concomitant increase in purchase intent."
Opposition spokesperson on finance, Dr Peter Phillips, agreed that the IMF programme has fostered fiscal discipline among Jamaicans.
"I believe it is the case that the platform of discipline and indeed the general improvements in confidence because of the fiscal discipline have formed the foundation for a lot of the positive expectations; those would be accentuated by the change and the proclamation by the new administration of plans to continue with the fiscal discipline and to pursue growth as a priority, but tempering that is going to be a wait-and-see attitude, so we will get a clearly picture going further on," Phillips said.
The Consumer and Business Confidence Survey, in the first quarter of 2016, recorded its largest increase, 17.6 per cent, in business and consumer confidence in its 15-year history, a phenomenon which Anderson attributes to a surge in expectations associated with an election and the swearing in of a new government.
Anderson argued that the results of the first-quarter survey have been viewed within the context of increased expectations that would have been anticipated from the February 25 general elections.
For Anderson, the fact that there was no correspondent surge in the purchase plans of consumers, despite the all time high level of confidence, indicates that consumers are not so imprudent to allow election results to dominate their spending decisions, as had previously been documented by past post-election surveys.
The survey, the first quarter of the year, shows that although nearly half of Jamaicans (48 per cent) were expecting increased incomes, their purchase plans have remained largely unchanged.
Vehicle-buying intentions were unchanged from last quarter at 16 per cent and home buying intentions moved slightly from 10 per cent to 11 per cent.
"I believe that persons are saying that this could be very short-term and hence let me just make sure I can balance my life for a while," Anderson said.
Anderson, however, pointed out that the purchase intent constraints may loosen if there is a continuation of current economic conditions. This, he says, is in keeping with historical data which indicates that business and consumer expectations generally taper off six months after an election.