By Al Edwards, Business Co-ordinator
The Leader of the Opposition Mr. Edward Seaga (left) and the Opposition spokesperson on Finance Audley Shaw (centre) listens as Dr. Omar Davies, Minister of Finance and planning addresses parliament. - Rudolph Brown/Staff Photographer
THE MINISTER of Finance and Planning Dr. Omar Davies, yesterday placed the country's fiscal deficit at 6.9 per cent of GDP, representing $33 billion.
As it now stands the fiscal deficit now represents some $37 billion.
Speaking in Parliament yesterday he said: "The Prime Minister indicated some weeks ago that we aren't going to make a deficit of between five and six per cent of GDP so we are projecting a maximum deficit of 6.9 per cent of gross domestic produce (GDP) so we are out by about one per cent and if you look at the numbers and within the context of the fact that interest payments alone will have accounted for above that.
It's a significant effort to be that close to our initial target. The projection for the GDP to end of March this year is 126.7 per cent. It's not where we want to be yet but it's a far cry from the 150 per cent which many have used as an indicator of the actual deficit of the country.
In order to achieve our medium term target we will have to control the rate of growth in wages, we will have to bring interest payments down and we will have to prioritise capital projects. So starting with the capital projects, we have identified those which are most critical to facilitate production and will work closely with the Minister of Development in that regard. So in those key areas which promise growth, we have ensured that those projects will be funded. In terms of interest payments you will have noted a downward path and that is encouraging and allows the Bank of Jamaica to be able to move aggressively to reduce interest rates."
The Leader of the Opposition Mr. Edward Seaga and the Opposition spokesperson on Finance Audley Shaw drew attention to the fact that the real debt figure was 143 per cent of GDP and that the Minister of Finance had made a mistake in his calculations.
Speaking on this latest deficit figure Mr, Seaga said: This is a case of smoke and mirrors and what cannot be escaped from is that the Government has overshot the deficit by some $8.3 billion. It has inflated the GDP figure in line with inflation which is now around 15 per cent."
