PM vows to uphold fiscal discipline
Published:Thursday | June 15, 2023 | 1:23 AMChristopher Thomas/Gleaner Writer
WESTERN BUREAU:
WHILE JAMAICA continues its gradual economic recovery following the global COVID-19 pandemic, Prime Minister Andrew Holness is pledging that his administration will maintain the country’s sense of financial discipline even as he asserts that Jamaica is suitable for new businesses to take root.
Holness made the declaration on Wednesday while addressing the opening session of the 2023 Outsource2LAC Global Digital Summit in Montego Bay, St James. The two-day conference was co-organised by the Inter-American Development Bank and the Government of Jamaica.
“Real gross domestic product [GDP] for the Jamaican economy grew by an estimated 2.7 per cent in January to March 2023, in that quarter, compared to the same quarter last year, with the services industry registering growth of 3.8 per cent. This represents our eighth consecutive quarter of economic growth, and our overall economic output levels have now surpassed pre-COVID levels, one year before our projected timeline,” Holness told the conference.
Uncertain outlook
“Despite the strong economic performance, my administration remains cognisant that the strong headwinds have not abated, and the global economic outlook remains highly uncertain. We will therefore maintain an approach of strong fiscal discipline while at the same time implementing policies that encourage private sector growth and an improved quality of life for our people,” Holness added. “We will therefore continue to pay down our debt and strengthen our buffers to respond to any future crises, making Jamaica stronger and more resilient than ever before.”
Holness also noted that Jamaica’s GDP ratio currently stands at 78 per cent, four percentage points shy of the 74.2 GDP ratio which had been forecasted by Finance Minister Dr Nigel Clarke during the budget debate in February this year, even with the slump in tourism foreign exchange during the pandemic.
“It is particularly notable that we have managed to continue our debt reduction trajectory even after increased social spending for protecting the most vulnerable during the pandemic and to manage the health crisis. Even during that, and even with the falloff in one of our major foreign exchange earners, we ended the financial year in March 2023 with a debt-to-GDP ratio of approximately 78 per cent,” said Holness.
“Seventy-eight per cent standing on its own may not sound like a major achievement, but we are coming from a debt-to-GDP ratio of almost 150 per cent a decade ago,” Holness continued. “Jamaica has now fully recovered, and we are aggressively pursuing investment and trade-friendly policies to accelerate this economic growth and prosperity for our people.”
The current 78 per cent GDP ratio is a significant decrease compared to Jamaica’s 147 per cent ratio prior to May 1, 2013, when Jamaica inked an agreement with the International Monetary Fund.