The Ministry of Finance, National Heroes Circle, Kingston, from where Dr. Omar Davies oversees the economy. - File

The Government's grip on expenditures slipped in May to $22.2 billion, compared to the $21.3 billion budgeted, but not enough to erode the savings in April when spending came in at $2 billion under budget.

At the same time, the tax authorities appeared to have stepped up their collections, surpassing their target by $808 million in May.

The gains for the month were largely from pay-as-you-earn income tax and tax on interest.

Treasury

The Treasury took in $16.23 billion from taxpayers - or five per cent more than the $15.4 billion anticipated - restoring lost ground in April when taxes came in $238 million under target.

In the most recent fiscal numbers released on the weekend, the Finance Ministry reported net revenue collections of $31.5 billion, or $570 million more than expected over the first two months of the fiscal year.

Revenues and grants combined reached $35.2 billion, but spending, while contained, was a heavier $41.9 million.

The ministry shaved $762 million off its debt-servicing costs over the period, paying out $14.6 billion of interest to investors against the $15.4 billion projected.

Those savings, plus lower-than-projected capital expenditure, resulted in Government shaving $1.08 billion off its two-month spending plan.

Thereins on spending, topped by better-than-expected tax collections, resulted in a more contained deficit of $6.7 billion. The Finance Ministry had anticipated a shortfall of $8.1 billion over April and May.

The ministry, in line with current trends, borrowed more than budgeted. Over the April-May period, new debt issues and loans reached $25.9 billion, or $1.4 billion above target. At the same time, the payouts for amortisations or redemption of principal debt was $11.7 billion, but this outcome was $983 million under budget.

On a wider scale, new debt figures released Tuesday shows that the debt stock has grown to $947.2 billion, a 10 per cent climb on its year-ago position.

Domestic debt

Domestic debt continues to run more than $100 billion ahead of Jamaica's external liabilities of US$6 billion (J$411.46 billion)

The total debt is expected to breach the $1 trillion mark this fiscal year.

In the two months of fiscal 2007/08, loan receipts were sufficient to cover the deficit, and flow funds to the bottomline. As a result, the overall balance of $7.6 billion at the end of May was double the $3.8 billion projected.

The primary balance also came in better than expected at $7.96 billion.

lavern.clarke@gleanerjm.com