Economist proposes gov't change how it accounts for primary surplus target
Economist John Jackson is proposing that the government changes how it accounts for the primary surplus target to ensure that more money remains in the economy to drive growth.
The primary surplus is the amount of money that is set aside to pay down on the debt.
At present, the primary surplus target is seven per cent of the total value of Jamaica’s goods and services.
However, according to Jackson, the Government should begin to move away from regarding the primary surplus target as a percentage of the GDP.
Instead he says the target should be set in real dollar amount.
He says this way, as the economy grows, the appropriate amount would be set aside for debt payment and not more than actually needs to be paid.
Jackson also says the primary surplus target should be equivalent to about 6 or 6.5 per cent of Gross Domestic Product.