- Financial analyst, Ralston Hyman, says Jamaica is well on track to achieving a balanced budget this year.
- This is based on several positive outcomes and developments resulting from the Government’s implementation of measures under the four-year Extended Fund Facility.
- Mr. Hyman said Jamaica’s current account deficit now stands at less than 10 per cent of the Gross Domestic Product (GDP).
Financial analyst, Ralston Hyman, says Jamaica is well on track to achieving a balanced budget this year.
This, he says, is based on several positive outcomes and developments resulting from the Government’s implementation of measures under the four-year Extended Fund Facility (EFF), negotiated with the International Monetary Fund (IMF), as well as the country’s Economic Reform Programme (ERP), endorsed by the IMF.
These relate to, among other things, the current account deficit, fiscal deficit, and Net International Reserves (NIRs).
He was speaking on the Jamaica Information Service’s (JIS) ‘Issues and Answers’ news magazine programme with host, Ian Boyne.
Mr. Hyman said Jamaica’s current account deficit now stands at less than 10 per cent of the Gross Domestic Product (GDP), coming out at $900 million for the first nine months of 2013.
He described this as a significant improvement over the $2 billion the country previously recorded, which represented 18 per cent of GDP.
“We have also seen the NIRs moving from US$917M in January to US$1.1B in February; and the target for March is US$1.246B. So we are edging closer to the target,” he outlined.
In relation to the fiscal deficit, Mr. Hyman, said prior to the government entering the current IMF agreement, this stood at over 10 per cent of GDP.
“What we are seeing now is that when we re-entered (the IMF agreement) we were at about six per cent of GDP. Given the outcome, up to January of this fiscal year, we are well on track to achieving a balanced budget. That’s a remarkable achievement (and) we believe that we will be able to hit those targets,” he added.
Mr. Hyman, who is also a member of the government’s Economic Programme Oversight Committee (EPOC), highlighted the anticipated results of structural reforms undertaken, through the passage of several pieces of legislation in the Houses of Parliament.
He pinpointed the Fiscal Rules Bill, which was in the Lower House this week, stating that “That (Bill) seeks to lock in the gains we have made from bringing the fiscal accounts down and we expect the Senate to also pass that Bill”.
Mr. Hyman said consequent on these undertakings, investor confidence in Jamaica is slowly returning. This, he attributes, to the extent of investments recorded, which has increased from US$200 million, to US$400 million over three years, up to 2014.
“Investors are responding to the measures that we are taking (which are) designed to improve…confidence in the Jamaican economy. Confidence is important to investments, (and) investments are important to growth and job creation,” the Financial Analyst argued.
Mr. Hyman added that strengthening the NIR is a key to rebuilding investor confidence.
“The NIR measures our capacity for foreign trade. When an investor looks at the NIR, they get the comfort level when (it) is high. So the higher the NIR (the) more confident (they will be) to invest in the country,” he explained.
In this regard, he remains confident that Jamaica will be able to meet the March 31 target to boost the NIRs to US$1.246B. “We believe that we will be able to hit (that) target … (and) once we (do), confidence will build (even further),” he said.