- Scotiabank Group Executive, Jason Morris, has pointed to positives in the local economy, despite the difficult economic situation being faced by the country.
- He cited the improving NIR; improvement in foreign direct investment flows; and the upward trend in GDP, as examples of the positives.
- Mr. Morris pointed out that Jamaica would be one of the few countries in the world that would achieve a budget surplus or a balanced budget for this fiscal year.
Scotiabank Group Executive, Jason Morris, has pointed to positives in the local economy, despite the difficult economic situation being faced by the country.
He cited the improving Net International Reserves (NIR); improvement in foreign direct investment flows; and the upward trend in the Gross Domestic Product (GDP), as examples of the positives. He added that the upcoming budget by the Government should provide more insight into the initiatives that will drive the economy into 2015 and beyond.
The Vice President of Business Analytics, Portfolio Advisory and Product Development was addressing a Scotiabank Development Seminar in Mandeville on March 12, on the topic: ‘Opportunities in a Challenging Environment’.
“The NIR has stabilized and is improving; foreign direct investment flows have stabilized and are improving; GDP growth, though nowhere near the seven and eight per cent that we want it to be, has started to trend up and stabilized, it is not falling; the unemployment rate is still too high, but at least we are not losing jobs on a continuous basis, as we were following the (financial) crisis. So, I think there are some green shoots in the economy,” Mr. Morris said.
He pointed out that in September 2012, tax revenues were growing at less than 2 per cent, the lowest rate in 20 years. However, by January 2014, revenues had increased by 9.9 per cent, he added.
“So, the things that the Government has done from 2012 until now have actually improved tax revenue collection,” Mr. Morris said.
He noted however, that the increase in tax revenue has not been enough to meet what was budgeted, leading to a shortfall of $15.8 billion. To address this, the government has cut expenditure by $19.7 billion.
“Just like any home or any business, if your revenues are falling short, then you will have to cut expenditure. That has resulted in us, for the first time in 18 years, generating a budget surplus or balancing the budget. It is a small surplus, but a big positive for Jamaica,” he emphasized.
Mr. Morris pointed out that Jamaica would be one of the few countries in the world that would achieve a budget surplus or a balanced budget for this fiscal year. The intention is to do that for the next three to four years under the agreement with the International Monetary Fund (IMF), he said.
He reminded that in 2011 Jamaica was generating a deficit of almost one and a half per cent and to close that gap in three fiscal years to generate a surplus, is significant.
“In fact the credit rating agencies have either upgraded Jamaica’s credit rating or increase our outlook from negative to stable and in some instances, positive. What this means is that the risk of default for Jamaica has actually been reduced marginally. We have a long way to go, because we still have a huge debt burden, but this is (how) we are going to get the debt down,” Mr. Morris said.