New Public Debt Definition will Help to Achieve Target

Finance and the Public Service Minister, Hon. Audley Shaw, says following the adoption of the new public debt definition, Jamaica will be closer to achieving its sustainable legislative debt target within the next eight years, or sooner.

The new debt definition identifies public debt as the consolidated debt of the specified public sector, except the Bank of Jamaica.

The specified public sector is comprised of Central Government and public bodies, excluding any public body certified by the Auditor General as primarily carrying out functions that are of a commercial nature.

This new definition, which comes into effect on April 1, will be consistent with the definition being utilised by the International Monetary Fund under the Precautionary Stand-by Arrangement.

Opening the 2017/18 Budget Debate in the House, yesterday (March 9), Mr. Shaw said the public debt is expected to be 115 per cent of the gross domestic product (GDP) at the end of the 2016/2017 fiscal year when compared to 124.1 per cent under the old definition.

Furthermore, he added that by the end of the 2017/2018 fiscal year, the debt to GDP ratio is projected to be 108.6 per cent.

“Of significance, this brings us that much closer to our sustainable legislative debt target of 60 per cent of GDP by financial year 2025/26,” he said.

He pointed out that sound debt management has been bearing fruit, as evidenced by Jamaica’s positive ratings during the 2016/2017 financial year.

“This has resulted in Moody’s Ratings Agency upgrading the country’s sovereign ratings from Caa2 to B3 in November 2016, and Standard and Poor’s Global Rating and Fitch Ratings affirmed the country’s ‘B’ ratings in September 2016 and February 2017, respectively. All outlooks are rated stable,” he said.