Economy on The Brink of Another Good Year – Dr. Davies

Finance and Planning, Minister Dr. Omar Davies, has expressed pleasure in the macroeconomic performance for the 2006/07 fiscal period, noting that the country was on the brink of another good year. “I am very pleased at where we are at this stage.
There are some areas of disappointment but by and large, the performance of the economy and the fiscal performance to date have been positive, and I believe we are on the brink of another good year, as would be reflected when we present the expenditure budget for 2007/2008,” he stated.
The Finance Minister was speaking in the House of Representatives yesterday (March 6), where the first supplementary estimates for the 2006/07 fiscal period were approved.
He noted that the estimates, which reflect an increase of some $14 billion in Government spending from $358 billion to $372 billion, were tabled within the context of a good 2006. “There were no natural shocks, no hurricanes and it allowed for the recovery in the agricultural sector and it allowed for production to generally proceed and we are also expecting growth of about three per cent,” he said.
“We were also lucky in that although the oil prices remained high at over US$60, we were not faced with the level of increases we were faced with in 2004 and 2005,” he added, noting that inflation was estimated at six per cent, which was significantly better than projected.
The supplementary estimates reflect increases in capital expenditure from $146.5 billion to $147.5 billion, while recurrent spending had moved from $211.7 billion to $224.5 billion.
The major areas of expenditure were related to debt payments and adjustments in salaries for civil servants and other government employees.
“There is an additional $4.6 billion, which is payment for additional interest occasion by a variety of factors, one being additional borrowing..in terms of the adjustments for the civil service, the sum is approximately $4.5 billion and in terms of the other salary increases, the sum is $1.355 billion,” Dr. Davies informed.
He further pointed to expenditure of $378 million for the electoral machinery, an additional for $340 million for solid waste and a new expenditure item of $241 million for Jamaica’s involvement in the Catastrophe Risk Insurance initiative.
“Eighteen countries in the Caribbean have come together in a historic sort of initiative, the first in the world, whereby we will seek to obtain insurance coverage against catastrophes,” Dr. Davies explained.