Jamaica Benefiting from Fiscal Discipline – PM

Jamaica is reaping the benefits of fiscal discipline, says Prime Minister, Dr. the Most Hon. Andrew Holness.

“Because we’ve built resilience into our fiscal programme, we have buffers, so when Hurricane Beryl struck, we didn’t have to borrow. We didn’t borrow a cent,” Dr. Holness said.

He shared that among other things, the government was able to disburse over 14,000 hurricane recovery grants, valued up to $400,000.

The Prime Minister was addressing a Diaspora Townhall in Barbados on Friday (February 21), following his participation in the 48th Caribbean Community (CARICOM) Heads of Government Meeting.

“The last decade we focused on just ensuring that our expenditure is within our means, that government is not a burden on you for more taxes and that we are not borrowing and so we are at that steady state now – big achievement for Jamaica,” he said.

Dr. Holness told the audience that a decade ago, the exchange rate was a big problem.

“Everybody was quarrelling about the Jamaican dollar and the instability of the Jamaican dollar. I don’t hear anybody quarrelling about that these days. Jamaica has a freely floating exchange rate. You can go to the bank and buy any amount of U.S. dollars you want. How did we achieve it? Fiscal discipline,” he said.

Meanwhile, Dr. Holness noted that Jamaica’s foreign exchange reserves, which is in excess of US$5 billion, is at the highest it has ever been.

“That reserve gives you the stability that keeps everything stable and of course you know the stability helps to control inflation, because as a part of this fiscal management framework we have a truly independent Central Bank,” he said.

He added that the Central Bank has been targeting inflation and Jamaica has been able to keep it under control.

Dr. Holness explained that even after the COVID-19 pandemic, the Central Bank brought inflation down “fairly rapidly” and it is now within the target range of four to six per cent.