Budget Supports Govt’s Commitment to Fiscal Discipline

Minister of Finance and the Public Service, Hon. Audley  Shaw, says the budget for fiscal year 2018/2019 is designed to achieve the targets entrenched in the fiscal rules and is within the context of the Precautionary Stand-by Arrangement (SBA) with the International Monetary Fund (IMF).

“Importantly, this new budget will be the last full year under the Standby Agreement with the IMF. We will continue to meet all commitments and we will meet all targets for reducing the debt-to-Gross Domestic Product (GDP) ratio, modernising the public sector, increasing the social safety net and strengthening fiscal and monetary buffers on our economy,” he said.

Mr. Shaw, who was opening the Budget Debate in Gordon House on Thursday (March 8), said Jamaica’s programme with the IMF has now advanced to the point where the support is essentially an insurance policy.

“Jamaica has had no need to access any of the US$1.64 billion of financing available since the SBA was agreed in 2016. Furthermore, the IMF shares our assessment that there is no indication of a need to access their financial support for the remainder of the SBA period that concludes in the last quarter of 2019,” he noted.

The Finance Minister said that as the country reaps the benefits of sustained fiscal discipline, the new budget will usher in a concerted campaign to support actions that will boost growth and increase incomes.

He noted that in fiscal year 2017/2018, 46 per cent of the budget was allocated to meet debt service payments and this will be further reduced to 37 per cent in 2018/2019.

“That means that fiscal discipline is working and that we are increasing the proportion of the budget that can be assigned to improving social services and productive infrastructure,” he said.

The Ministry included in its Estimates of Expenditure for fiscal year 2018/2019, forward expenditure estimates for 2019/2020, 2020/2021 and 2021/2022.

The forward estimates, which were being included for the first time, are aligned with the medium-term aggregate expenditure ceilings as reflected in the fiscal management strategy.

Minister Shaw noted that “although these forward estimates are only indicative and are not voted by Parliament, they represent a critical step forward in our ability to help investors and businesses with their long-term planning and to signal our continued fiscal discipline.”