JIS News

Story Highlights

  • Minister of Finance and Planning, Dr. the Hon. Peter Phillips, is upbeat about the economic strides being made under the agreement with the IMF.
  • The Minister said the country has so far received more than US$300 million in loans and grants from the multilaterals.
  • The net international reserves (NIR) are increasing; the national debt is trending downwards; and growth has returned to the economy.

Minister of Finance and Planning, Dr. the Hon. Peter Phillips, is upbeat about the economic strides being made under the agreement with the International Monetary Fund (IMF), which has resulted in three quarters of successful reviews, and inflows from multilateral institutions.

Addressing residents at the first town hall meeting for 2014, hosted by the Kingston and St. Andrew Corporation (KSAC), at St. Luke’s Anglican Church, in Cross Roads, on February 19, the Minister said the country has so far received more than US$300 million in loans and grants from the multilaterals.

He also noted that the net international reserves (NIR) are increasing; the national debt is trending downwards; and growth has returned to the economy.

Dr. Phillips informed that the debt to Gross Domestic Product (GDP) ratio, is projected to decline by six to seven per cent by the end of the current fiscal year.

The Minister emphasised that Jamaica has the highest debt to GDP ratio in the region, at 140 per cent, noting that a debt to GDP ratio of more than 60 per cent is generally a cause for concern.

He pointed to major measures taken to reduce public expenditure and the debt, and to stabilize the economy, such as the ongoing public sector wage restraint, and the national debt exchange (NDX). Dr. Phillips commended public sector workers and bondholders, particularly pensioners, for the sacrifice they have made for the national good.

“Thus far, the (IMF) programme is showing positive results, even though it has been a difficult road for the majority of our population to travel,” the Minister said.

Citing some of the “good signs,” Dr. Phillips noted that the inflation outturn for the end of the fiscal year is on a trajectory for the lower end of the target of between nine and 10.5 per cent.

Additionally, he said growth, expected at 0.5 to one per cent, is on target for the upper end of that projection by the end of the financial year.

“There are some sectors that are performing phenomenally well…Agriculture, for the December quarter, annualized is about 10 per cent growth. We are seeing in tourism, an outturn of approximately six per cent…mining is also growing at close to nine per cent. Growth is the critical objective,” he told the residents.

Meanwhile, the Finance Minister pointed out that while the unemployment rate, as of October 2013, was at 14.9 per cent, which is 0.9 per cent higher than in 2012, in comparison to the April and July 2013 outturn, there was a decline of 1.4 percentage points, and 0.5 percentage point, respectively.

“This represents the second consecutive downward trend in the unemployment numbers. It is still much too high, but the trend is moving in the right direction,” he said.

Dr. Phillips emphasised that built into the IMF agreement is a social protection component, put forward by the Government, to protect the most vulnerable.

“For that reason, we have increased the benefits under PATH, and there will be an additional increase in the coming fiscal year. We have tried to find more effective ways to utilise the resources to provide subsidies for school transportation, because we want to ensure that when  you’re giving money to families in need,   you’re giving it in the most effective way,” he said.

The Minister reiterated that the Government is committed to help small businesses, by providing support through the Development Bank of Jamaica (DBJ).

He informed that businesses have so far taken up 92 per cent of the $2 billion facility as at the end of October 2013. This equates to $1.8 billion in loans to 6,690 small and medium businesses, exceeding the $1.39 billion lent in 2012/2013.

Dr. Phillips argued that in order to continue on a positive path, certain commitments must be made, such as the resolve to reduce the national debt.

The Minister also provided updates on other development activities and projects, including: the Logistics Hub Initiative; the development of agro parks, seven of which have been launched; and the North-South highway link.

“The administration is concerned, not just that we get growth, but that we get growth that allows for more and more people to participate in the benefits of that economic growth. We will never have a healthy society until we correct those economic imbalances that we have inherited from our history,” Dr. Phillips emphasized.