KINGSTON — The Jamaican economy is expected to grow beyond the 1.5 per cent target envisaged for this fiscal year, says Finance and Public Service Minister, Hon. Audley Shaw.
“It is a modest growth target…and it is my intention that with the signs that I have seen, and with the hard work that we are all committed to, it is quite likely that we will exceed that modest target…and it is expected to increase to two per cent in the next two years,” Minister Shaw said in his Budget Debate presentation in Parliament on April 28.
He said that the improved performance is predicated on recovery in the global economy, particularly for the United States as the recession is expected to end in 2011.
“In addition, the expected re-opening of WINDALCO’s Kirkvine plant by the middle of this year and ALPART next year, provides significant growth impetus over the medium-term, and we also expect growth in agriculture and tourism,” Minister Shaw said.
Turning to inflation, the Minister said the projections have been revised downward to seven per cent for 2011/12 and 6.5 per cent for each of the two successive fiscal periods.
He further informed that the Net International Reserves (NIR) is projected to remain around US$2 billion.
In the meantime, the Minister assured that the fiscal targets will be aggressively pursued to demonstrate the Government’s unyielding commitment to fiscal adjustment in a manner that the country has not seen for a long time.
“The medium-term programme projects a fiscal deficit of 4.6 per cent of GDP (gross domestic product) towards a balanced budget in 2015/16,” he informed.
Mr. Shaw pointed out that over the past year, fiscal policy has been carefully reviewed and evaluated with an emphasis on tax policy, adding that over the years, numerous studies on Jamaica’s tax policy have been undertaken.
“The Government is not short of proposals. Action must now be taken -proposals must now be implemented to create a real and concrete basis towards our aim of eliminating the overall public sector deficit during the medium-term and getting our debt ratios down. The Government must begin to use fiscal policy not just to support itself, but to promote economic stability and growth,” Minister Shaw emphasised.
The Minister’s presentation was themed: ‘From Stabilisation to Growth’.
By ALECIA SMITH, JIS Reporter