Spending cut

With the Jamaican economy reporting declines in gross domestic product for two successive quarters, indicating a recession, the Government is planning to spend $1.26 trillion for the financial year 2025-2026. This is $126 billion, or 9.1 per cent, less than last year’s revised Budget of $1.38 trillion. Given the five per cent inflation experienced up to December, the Government’s Budget is in effect about 14 per cent less than last financial year.

Fayval Williams, minister of finance and the public service, tabled the 2025-2026 Estimates of Expenditure in Parliament yesterday, revealing that just under $1.1 trillion of the Budget will be financed by taxes and other receipts, while about $158.44 billion in loans will satisfy the shortfall.

The bulk of the expenditure, nearly $1.20 trillion, will go towards recurrent or day-to-day expenditure. The money for recurrent expenditure in this year’s Budget is $127 billion less than the expenditure for the last financial year.

Only $62.59 billion of the tabled Budget will go towards special projects or capital expenditure. This is about the same as the revised capital budget estimates for financial year 2024-2025.

Williams said the nearly $1.3-trillion Budget is indicative of Jamaica’s resilience and the sound policies of the administration. She said the Budget remains firmly in the trillion-dollar range despite several challenges, including weather events such as a drought, Hurricane Beryl, and Tropical Storm Rafael.

“This continued strength of our Budget has been so despite a backdrop in fiscal year 2024-2025 of dry weather or drought, severe impact of Category 5 Hurricane Beryl, Tropical Storm Rafael, and rainfall in all 14 parishes during the month of November that ranged between a minimum of 125 per cent all the way to 300 per cent of the 30-year mean rainfall for the month of November,” Williams told Parliament.

Account for hardships

Meanwhile, Julian Robinson, opposition spokesman on finance, commenting in Parliament as the Estimates were tabled, said that in spite of the country’s macro-economic indicators, the details of the Budget must account for the hardships of the Jamaican people. He noted that the Government was unable to spend about $19 billion of the $80 billion in last year’s Budget.

“Which is almost a quarter of your capital budget. It means you are also contributing as government to the economic decline,” Robinson remarked as he referred to the fact that Jamaica has seen two successive quarters of negative movement of GDP, which signals a recession.

Debt service will take the largest slice of the Budget, accounting for $340.27 billion or 28.41 per cent of the total recurrent budget, while non-debt recurrent expenditure will be $857.18 billion.

The Ministry of Education, Skills, Youth and Information gets the largest share after the Ministry of Finance, with an allocation of $183.52 million. They are followed by the Ministry of Health and Wellness with $155.64 million and the Ministry of National Security with $154.86 million.

Meanwhile, a nearly $2-billion allocation has been made for the holding of general elections, constitutionally due by September this year. The Budget outlines that $1.95 billion is to be spent on “parochial elections”, which are constitutionally due.

However, Director of Elections Glasspole Brown told The Gleaner that that description is an error in the Estimates, and the figure is for the parliamentary elections.

The Estimates will be scrutinised by the Standing Finance Committee of Parliament on March 6 and March 7 before the finance minister opens the 2025 Budget Debate on March 11. The National Budget must be passed in the House of Representatives by March 31 of each year, when the financial year ends.

neville.graham@gleanerjm.com

Budget highlights

• The Budget of $1.26 trillion for the financial year 2025-2026 is 9.1 per cent less than last year’s Budget of $1.386 trillion.

• $62.59 billion has been allocated for capital expenditure with the Ministry of Economic Growth and Job Creation getting $30.55 billion.

• 28.941 per cent of recurrent expenditure is for debt servicing