Cash Reserves Of $90 Billion At Start Of 2020/2021

Finance and the Public Service Minister, Dr. the Hon. Nigel Clarke, says Jamaica opened the 2020/21 fiscal year with cash reserves of approximately $90 billion, or more than four per cent of gross domestic product (GDP).

Opening the 2021/22 Budget Debate in the House of Representatives on March 9, Dr. Clarke said this was achieved as a result of the Government’s pursuit of a prudent policy of building up the country’s cash reserves to pay down debt.

“As a result, when the COVID-19 pandemic came, we were able to finance a 3.5 per cent fiscal deficit without materially increasing nominal debt. Though we have endured the most massive economic shock in our history, our nominal debt remained flat during the year,” he said.

In addition, the Minister said the country’s stock of foreign denominated debt decreased during the fiscal year.

He further noted that Central Government provided a loan of US$140 million to Clarendon Alumina Partners (CAP) to repay a loan obligation due to the Noble Group, which has lowered CAP’s interest costs.

The Minister said this also allowed CAP to renegotiate its marketing agreement with Noble, improving prices.

“We also swapped US$50 million of Inter-American Development Bank (IDB) USD denominated debt into JMD debt in an innovative transaction pioneered by the IDB. Both of these transactions contributed to a lowering of the nominal USD denominated debt during the fiscal year,” he noted.

“This compares with previous economic crises where nominal USD debt increased during the crisis. This time around, in the worst economic crisis in our history, nominal USD debt actually decreased,” Dr. Clarke said.