Dr. Phillips Highlights Progress Under ERP

Minister of Finance and Planning, Hon. Peter Phillips, says the country has made tremendous strides under the Economic Reform Programme (ERP) resulting in a more investor-friendly business environment and continued economic growth.

“The successful performance under the economic programme has led to a sharp increase in investor and consumer confidence, facilitated improvement in the ratings by the international rating agencies, and has involved a successful re-entry into the international capital markets, where last year, we were able to raise $US800 million at the lowest rates ever achieved by Jamaica,” he said.

The Finance Minister was addressing potential investors yesterday (March 11), at the Jamaica Investment Forum (JIF) at the Montego Bay Convention Centre.

He pointed out that under the programme, “changes have been made to the incentive landscape, with perhaps the most far-reaching set of tax reform measures undertaken in more than two decades, which have had the net effect of reducing the effective tax rates for investors.”

He said investors have also benefited from “generous” capital depreciation allowances; elimination of customs duties on all productive inputs and the creation of “a new regime that allowed all sectors to benefit from a generous tax landscape.”

Minister Phillips noted that at the start of the programme, debt to gross domestic product (GDP) was approximately 145 per cent compared to 139 per cent at the end of the current fiscal year.

He said projections are for a 130 per cent debt to GDP ratio at the end of fiscal year 2015/16

“Our net international reserves (NIR), which stood at less than US$800 million at the start of the economic reform programme is currently close to $US2 billion. At the start of the programme, our current account deficit was close to 14 per cent of GDP…our current account deficit for the fiscal year ending March 31, 2015 will be 5.3 per cent of GDP, and is scheduled to be a little above two per cent of GDP at the end of the next fiscal year,” Minister Phillips outlined.

Turning to inflation, he said this is forecasted at five per cent or below for the current fiscal year, compared with 6.4 per cent for calendar year 2014, and 9.5 per cent for the previous calendar year.

As it relates to growth, he informed that the anticipated rates of growth for the calendar year and the fiscal year, are in the positive.

This is despite severe drought, which caused a reduction in agricultural production.