Sun | Sep 24, 2023

Phillips expects economic growth to gain momentum

Published:Wednesday | January 29, 2014 | 12:00 AM

Gary Spaulding, Senior Gleaner Writer

Propelled by the steady performance of the Government's Economic Reform Programme that has brought encouraging outcomes to critical benchmarks in 2013, Minister of Finance, Planning and the Public Service Dr Peter Phillips yesterday forecast accelerated economic growth for the coming years.

The man who has been entrusted with the challenging task of steering the economic ship through turbulent tides, told the House of Representatives yesterday that fiscal performance remained resilient throughout 2013-2014, with Central Government primary surplus and budget deficit targets all being met.

"Specifically, for the December and March quarters, the projection is for growth to continue and, indeed, to strengthen," asserted Phillips.

But the parliamentary Opposition was not as upbeat as members, led by newly restored Opposition Spokesman on Finance Audley Shaw, Opposition Leader Andrew Holness, Industry and Commerce Spokesman Karl Samuda, and former tourism minister, Edmund Bartlett, sought to rain on Phillips's parade.

The opposition members argued that something must be done about worrying exchange and interest and inflation rates that are directly related to the plight of the poor and vulnerable.

But Phillips stuck to positive outcomes. He said provisional information indicates that the Central Government primary surplus to November 2013 amounted to $42.5 billion.

He said the fiscal consolidation effort bodes well for the attainment of the key primary surplus target of 7.5 per cent of GDP for financial year 2013-2014 and over the medium term.

He noted that the Statistical Institute of Jamaica had reported that there had been real GDP growth of 0.5 per cent in the September 2013 quarter, following a decline of 0.2 per cent for the preceding quarter that is reflected in increased output in agriculture, forestry and fishing, mining and quarrying, construction, and hotels and restaurants.

"As I have indicated, there has been a return to growth, modest though it is. This has been the result of the greater levels of confidence and the country's performance under the Economic Reform Programme," said Phillips.

He added that the trajectory for the fiscal year to date shows that inflation has been in line with projections. He said inflation for the calendar year 2013 was 9.6 per cent.

"For the financial year 2013-2014, we are projecting an inflation out-turn in single digits," he said.

... Deficit decreases

In relation to external accounts, Finance Minister Dr Peter Phillips yesterday told Parliament that estimates for the fiscal year to September 2013 indicate that there was an improvement in the current account deficit relative to the corresponding period of financial year 2012-2013.

Phillips said for the fiscal year to September 2013, the current account deficit was estimated at US$678.7 million, which represented a reduction of US$347.8 million (or 33.8 per cent improvement) when compared to the corresponding period in financial year 2012-2013.

"This positive development was reflected in the performance of nearly all subaccounts," he said.

"The goods and services sub-account recorded the greatest improvement of US$294.8 million due mainly to a reduction in imports ... . This trend is expected to continue for the rest of the fiscal year."