EGC Chairman Welcomes Positive Economic Indicators

Economic Growth Council (EGC) Chairman, Michael Lee-Chin, has welcomed several key positive economic indicators recorded at the end of the April to June 2018 quarter.

Notable among these, he says, are an estimated 1.8 per cent economic growth; Tax Administration Jamaica’s $79.9 billion revenue intake, which he notes is 9.2 per cent above the $73.2 billion target; and further reduction in Jamaica’s debt to gross domestic product (GDP) ratio to 105 per cent.

The Chairman was speaking at the EGC’s Sixth Quarterly Report at Jamaica House on Thursday (August 23).

Mr. Lee-Chin said based on the TAJ’s revenue inflow for the June 2018 quarter, the agency is on track to exceed its 2018/19 fiscal year target of $320 billion.

“We are being more tax compliant which, as citizens, all of us have to contribute and pay our fair due. We have a long way to go, but the trend is directionally right,” he said.

Regarding the debt to GDP ratio, Mr. Lee-Chin said based on current developments, he remains optimistic that this will fall below 100 per cent by the end of the current fiscal year, in March 2019.

Other key out-turns which the EGC Chairman highlighted included: Net International Reserves totalling US$31.1 billion; a decline in the inflation rate to 2.8 per cent; and the Bank of Jamaica’s (BoJ) lowering of the Policy Interest Rate to two per cent, indicative of the eighth consecutive decrease of 50 basis points since 2016.

Mr. Lee-Chin contended that the latter out-turn indicates that “we are providing an environment whereby access to financing and credit can be leveraged into growth.”

Also of note, he further stated, is the sustained level of business and consumer confidence, the indices for which averaged 150 points.

“This represents the highest reported since the start of the survey in the second quarter of 2001. So we are, today, seeing the highest (levels of) business and consumer confidence since 2001… and as we know, confidence is the precursor to any successful endeavour,” the Chairman said.

He also noted further reduction in unemployment, which has fallen to 9.7 per cent, as also the decrease in the poverty rate from 21 per cent to 17 per cent in 2016, representing the largest annual decline in 10 years.

“We really have sacrificed a lot to (get) here. Our sacrifices are being recognised because… we now have a rating of ‘B’ (by) Fitch and Moody’s credit rating (agencies)… and the outlooks in both cases are improved from ‘Stable’ to ‘Positive’ for 2018,” the EGC Chairman added.

Against this background, Mr. Lee-Chin urged that the confidence and gains recorded over the last five years be leveraged to generate higher levels of economic growth, while cautioning against complacency and emphasising that “there is still a lot of work yet to be done.”

“This is why the EGC, as lead growth enabler, has been taking the approach to aggressively collaborate with Ministries, Departments and Agencies and bringing them together with private sector implementers to identify issues and hindrances to growth and devise practical solutions that can lead to rapid, sustained achievable and inclusive economic growth,” he said.