Finance Minister Says Country Must Remain Focused on Debt Reduction

Finance and the Public Service Minister, Dr. the Hon. Nigel Clarke, says Jamaica must remain focused on further debt reduction and maintaining fiscal credibility over the long term, in order to avoid a reverse of the gains in these areas.

Speaking at the Private Sector Organisation of Jamaica’s (PSOJ) annual economic forum at The Jamaica Pegasus hotel, New Kingston, on Thursday (September 20), Dr. Clarke reiterated that Jamaica has made significant progress in reducing its debt from 147 per cent of gross domestic product (GDP), and is projected to fall below 100 per cent by the end of the current fiscal year, in March 2019.

“We cannot afford to stop there. We must continue on the path of reducing our debt until we get to our objective of 60 per cent of GDP by 2025,” the Minister emphasised.

Noting that Jamaica now stands out as the “star performer” among Caribbean economies, Dr. Clarke said based on developments in several other states, “it’s shocking how quickly… [the] fortunes [recorded] can be reversed”.

“Countries that we would have held up as role models… based on their operations and infrastructure, have, overnight, transformed to countries on the edge… and we should observe that with a strong dose of humility, which should serve to remind us of the connection between [economic] resilience and debt,” he said.

Dr. Clarke said the Government’s quest to reduce the debt ratio to 60 per cent of GDP, requires the collaborative input of the private sector to ensure that this goal is achieved.

“That is why the Government will seek to further institutionalise economic resilience [and] the path towards economic independence by strengthening our fiscal responsibility framework with the establishment of a Fiscal Council,” he noted.

The Minister pointed out that Jamaica’s fiscal rules were legislated in 2010 and strengthened in 2014, whereby a fiscal balance is prescribed on an annual basis and, based on the prevailing economic variables, all parameters are geared towards achieving the 60 per cent debt-to-GDP ratio.

“The Fiscal Council will simply be the guardian and interpreter of those fiscal rules, which already exist, and will help us to remain on this debt-reduction path,” Dr. Clarke added.