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Approach new year with guarded optimism, advises economist

Published:Sunday | December 29, 2013 | 5:43 PM

A local economist is urging Jamaicans to approach the New Year with a sense of "guarded optimism" as the country adjusts to the stipulations of the International Monetary Fund (IMF) economic support programme.

Reacting to news that the IMF has given the country high marks in its second review, economist Errol Gregory said while growth has occurred and is expected in 2014, Jamaica is yet to test the efficacy of legislations implemented as part of the programme, particularly the Omnibus Tax Incentive Act and the Security Interest in Personal Property Act.

The Omnibus Tax Incentive Act eliminates the minister's discretionary powers to grant or validate any tax relief, and puts in place a transparent regime for limited tax incentives; while the Security Interest in Personal Property Act broadens the range of assets which persons may use as collateral to secure business loans.

The IMF has predicted that there will be growth of just under one per cent for the 2013/2014 fiscal year.

Further, Gregory points to challenges such as increasing inflation due to the dramatic slide of the dollar, and revenue shortfalls which the Government must also deal with. He says although the Government has been able to achieve its targeted primary surplus, which is the amount of money it has left for expenditure after it finances the debt, it has been having a challenge with meeting its revenue targets.

Reflecting on the country's recent performance on the world stage in athletics and music, Gregory says the country's economic situation is such that it will similarly have to work diligently towards achieving set targets.

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