Deficit balloons to J$51b as taxes fall short
Published:Friday | January 6, 2012 | 12:00 AM
In April and again in June, the finance ministry did something unusual: it eked out monthly fiscal surpluses on central government operations.
But since then, largely because the projected tax income fell below expectations five times so far this fiscal year, Jamaica's financial stewards have blown a bigger hole in the budget than initially projected. At November 2011, Jamaica reported a fiscal deficit of J$51 billion, having blown through the original target by more than J$5 billion.
November is the third straight month of missed deficit targets, with the gap growing wider in each successive period following August's outperformance.
Tax revenues fell more than J$8 billion short in the eight-month period, a portion of which was offset by surgical cuts amounting to just under J$3 billion in planned spending.
The Government had little room to manoeuvre, constrained as it were by a wage and debt-financing bill that was equivalent to 86 per cent of collected tax and non-tax revenue or 81 per cent of total revenue.
The top underperforming tax segments included GCT collections, corporate income tax, customs duty and SCT on imports.
During the period, Jamaica borrowed another J$106 billion from the markets and external financiers, sufficient to cover repayment of J$75 billion of maturing debt and partially pay for business transacted by the public sector that taxes and grant aid were insufficient to fund.
Absent its debt obligations, the finance ministry would have had a J$25-billion surplus after payment of recurrent bills as reflected in its primary balance. The primary surplus was also J$5 billion off target.