Jamaica Poised to Record Further Growth – EPOC

Economic Programne Oversight Committee (EPOC) Co-Chairman, Richard Byles, says Jamaica remains poised to record further growth, based on current positive economic developments.

Notable among these, he says, are improved revenue generation and collection, and reductions in the trade deficit, inflation and unemployment.

The Co-Chairman was speaking at EPOC’s quarterly media briefing, held  at Sagicor Life Jamaica Limited’s head office, in New Kingston, on  November 5.

Mr. Byles said revenue generation for the first six months of the 2015/16 fiscal year was slightly ahead of target by $0.5 billion or 0.2 per cent.

He indicated that tax revenue collections for this year continued to perform well, recording $195.1 billion at the end of September, some $5 billion or 2.6 per cent better than budgeted.

This figure, he added, was also $26.6 billion or 16 per cent more than the inflow for the corresponding period last year.

The tax categories with the best performance at the end of September 2015 were: Company Tax, which generated $1.9 billion more than projected; Special Consumption Tax (SCT), $2 billion; and General Consumption Tax (GCT), $1.9 billion.

Mr. Byles said the categories performing under budget were: PAYE, which fell short by $0.47 billion; and Customs Duty, $0.8 billion, while adding that grant provisions also lagged behind by $3 billion.

“The tax revenues have performed so well that it can accommodate a little lag on the grants,” he argued, and expressed the hope that the administration will embark on plans to “try and pull back that number in the next six months.”

Regarding the trade deficit, Mr. Byles noted that the Statistical Institute of Jamaica (STATIN) reported that this fell from US$2.6 billion to US$2.2 billion for the period between January and July.

This decline, he informed, was attributed to reductions in oil and food imports.

Mr. Byles said STATIN also reported that the September inflation outturn was 0.4 per cent, down from 0.8 per cent in August.

The Co-Chairman informed that electricity and transportation costs fell during the month, by an average one per cent, and that education costs went up 5.3 per cent,  and food, 1.1 per cent.

“For the calendar year to date, that is from January to September, inflation was 2.6 per cent, and for the trailing 12 months (that is) September this year back to August of last year, it was 3.3 per cent. So generally, inflation (is) pretty low,” he noted.

Mr. Byles projected that the 2015 calendar year inflation rate “could close out at anywhere between 5 and 5.5 per cent.”

As it relates to unemployment, Mr. Byles said STATIN also indicated that the figure fell to 13.1 per cent at the end of July 2015, from 13.8 per cent, while noting that 16,800 jobs were created during the period.

“All of these facts lead EPOC to believe that we are on the right economic path, and that we should see more  growth as we go along quarter by quarter; (as) long as we don’t have any exogenous shocks,” he said.