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  • The Economic Programme Oversight Committee (EPOC) says it expects the Jamaican economy to continue on growth path, and maintain minimal inflation figures towards the end of the year.
  • Presenting figures on the key performance indicators of the economy in October, EPOC says the cumulative primary surplus for April to October was $45.9 billion, which is 7.5 per cent better than the Government’s target of $42.7 billion.
  • Additionally, at the end of November the country’s Net International Reserves (NIR) stood at US$2,019.8 Million, which surpasses by US$560 million, the target set by the International Monetary Fund (IMF) for December.

The Economic Programme Oversight Committee (EPOC) says it expects the Jamaican economy to continue on growth path, and maintain minimal inflation figures towards the end of the year.

The Committee’s co-chair, Richard Byles, expressed this optimism as he addressed journalists at its monthly press briefing in Kingston, today (December 9).

Mr. Byles argued that the positive outlook stems from the ending of the recent drought and positive tourism numbers to date.

Presenting figures on the key performance indicators of the economy in October, EPOC says the cumulative primary surplus for April to October was $45.9 billion, which is 7.5 per cent better than the Government’s target of $42.7 billion.

Additionally, at the end of November the country’s Net International Reserves (NIR) stood at US$2,019.8 Million, which surpasses by US$560 million, the target set by the International Monetary Fund (IMF) for December.

“So, both the primary balance and the net international reserves seem to be in good shape as at October and in the case of the NIR, as at November,” Mr. Byles noted.

However, the EPOC co-chair said tax revenues continue to under-perform. Figures presented for the April to October period showed a $7.4 billion shortfall in tax revenues for the Government. The main contributors to this shortfall are collections from General Consumption Tax (GCT), on both local and imported goods, and company taxes.

On the other hand, PAYE monthly collections continue to exceed targets set by the Government. Data show a10.3 per cent increase in collections monthly, and a 3.2 per cent increase year to date.

As with previous months, the Government compensated for the shortfall in tax collections by cutting expenditure by $12.5 billion.

Mr. Byles, while expressing concern for the trend in under-spending by the Government to meet the primary surplus, said the target is difficult for the Government to meet.

“In a way, you can’t blame the administration for cutting budget to meet target. Indeed, I would say in previous IMF agreements, had we done that, we wouldn’t have failed some of the previous ones, so it’s not a bad thing. It’s good financial management in the short term to hit the IMF targets,” he said.

Review of the performance of the economy for the month of October was measured against the Government of Jamaica budget, as there are no intra-quarter Quantitative Performance criteria in the IMF supported programme.

The IMF mission to Jamaica recently completed its sixth review of Jamaica’s Extended Fund Facility (EFF) with the IMF, and noted that the country’s economic transformation programme is “on track and remains strong.”

The Executive Board of the Fund is now considering the sixth review of the Extended Fund Facility programme and will, on December 19, release just about US$68 million to Jamaica, if approved.

 

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