JIS News

Finance and Planning Minister, Dr. Omar Davies, has said that the inflation rate for the month of December 2005 was 0.1 per cent, which would result in an outturn of about 1 per cent for the last three months of the calendar year.
The Finance Minister, who was speaking to journalists at the Half Moon Hotel in Montego Bay this morning (Jan. 17), after addressing the Jamaica Stock Exchange’s Investments and Capital Markets conference, said that government’s efforts at controlling inflation were working.
“This is a very pleasant sort of return to normality and if this continues in the next three months (January, February and March), then the inflation for the fiscal year (April 2005 through to March 2006) should be in the 12 to 13 per cent range, which is far better than we had once feared, so it demonstrates that the policies continue to work,” he stated.
He attributed the positive outturn to the excellent recovery in domestic agriculture following the devastating weather conditions of last year, and the reasonably stable oil prices, although he admitted, the price of oil still remained high.
Dr. Davies noted that the low inflation rate should have positive effects on several areas within the economy, including attempts to have a new Memorandum of Understanding (MoU) with trade unions representing civil servants.
He indicated that negotiations have begun for a successor agreement to replace the existing MoU, which expires at the end of the financial year. “We have set ourselves a target to have a successor agreement without a break, beginning the first of April,” he informed, adding that a meeting was held on Tuesday (Jan.17) with the relevant parties.
Turning his attention to the upcoming budget, the Finance Minister admitted that in looking realistically at the projections in terms of the additional needs, especially for road rehabilitation and reconstruction, the target of having a balanced budget for 2005/2006 would not be achieved. He expressed the opinion that neither would that target be achieved for the 2006/2007 budget.
“The major challenge for the budget relates to the need for significant additional resources for reconstruction. Apart from the road network which has been badly damaged, the bridges and erosion, there is need for significant additional resources for river training, etcetera,” he stated.