Byles bullish on growth in quarters ahead
The Economic Programme Oversight Committee (EPOC) says while it is understandable that Jamaicans are impatient to see more substantial economic growth, a little more perseverance in pursuing the right policies will see improvements in the quarters ahead.
Committee co-chairman Richard Byles, noted that all the economic indicators in Jamaica were pointing in a positive direction, which should "see more substantial growth as we go along, quarter by quarter".
Jamaica recorded gross domestic product growth of 0.4 per cent in the April-June 2015 quarter and 0.6 per cent in the quarter to September.
"As long as we don't have any exogenous shocks like the weather, or economic calamities in the United States or elsewhere in the world, terrorist acts, things that we can't control, I think that we are on a path for economic growth," he said.
Based on government data, Byles also believes Jamaica is on track to meet the most important targets for the 10th test under its IMF-supported programme.
Among those, the primary surplus stands at $50.8 billion against an IMF target of $40 billion, and the net international reserves was US$2.44 billion at the end of September, compared with a target of US$1.44 billion.
Revenue performance for the first six month of fiscal year 2015-16 was ahead of target by $0.5 billion or two per cent, and was $25.1 billion or 13.4 per cent above those collected during the corresponding period last year.
Tax collection was $4.9 billion ahead of the budgeted $190.2 billion and better than last year by $26.6 billion.
"In the past, we have been quite concerned, if not critical of ... tax collection, and what they have shown us this quarter and this year to date is that they can achieve those targets," Byles said at his regular press briefing on Thursday.
Corporate tax performed above expectations by $1.9 billion and by $3.1 billion compared to last year.
"This is an important tax because it gives you a signal as to how the business community is doing. To the extent that they are paying more taxes than last year and exceeding the budget this year augurs well for growth in the economy generally," he said.
Still, capital expenditure continued to lag its budget and was $6.5 billion or 34 per cent behind. "I'm told this has to do with the inability of the Government" to get certain projects going, although "it doesn't have anything to do with holding back from the projects," Byles said.
Expenditure for the April-August period was $13.8 billion below budget. Of that amount, recurrent expenditure was $7.3 billion below budget, mainly accounted for by savings of $3.4 billion on interest and $3.9 billion on wages, both of which will catch up to budget as the bond-raising expenses and public-sector wage increase are paid. In October, $3 billion of back wages was paid to public-sector workers.
Byles also cited the newly released jobs report from the Statistical Institute of Jamaica, which shows the unemployment rate for July 2015 at 13.1 per cent, down from 13.8 per cent recorded in July 2014.
With unemployment down, that is "excellent because that's where the rubber hits the road, and that's what we really ultimately want," the EPOC co-chairman said.