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  • The country’s Net International Reserves (NIR) remain strong, standing at US$1.91 billion at the end of February.
  • Minister of Finance and Planning, Dr. the Hon. Peter Phillips, informed that the gross reserves, covering approximately 17.1 weeks of imports of goods and services, are “comfortably” above the international benchmark of 12 weeks of imports of goods and services.
  • He was opening the 2015/16 Budget Debate in the House of Representatives on Thursday, March 12.

The country’s Net International Reserves (NIR) remain strong, standing at US$1.91 billion at the end of February.

Minister of Finance and Planning, Dr. the Hon. Peter Phillips, informed that the gross reserves, covering approximately 17.1 weeks of imports of goods and services, are “comfortably” above the international benchmark of 12 weeks of imports of goods and services.

He was opening the 2015/16 Budget Debate in the House of Representatives on Thursday, March 12.

The NIR represent contingency funds, which can enable the country to survive severe external shocks, to cope with shifts in investor confidence and natural disasters.

While the reserves are not credited to the country’s revenues, they provide confidence to the markets that external obligations can be met.

In the meantime, Dr. Phillips said the country’s balance of payments deficit on the current account continues to decline.

He informed that the forecasted out-turn on the current account for the fiscal year 2014/2015 is 5.3 per cent of gross domestic product (GDP) influenced both by a containment of domestic demand as well as the decline in related imports (including oil) and the improvement in economic conditions in the main markets.

“Today, it stands at five per cent of GDP and is moving downwards. We can actually contemplate the time when we will not have a deficit, but a surplus on our balance of payments current account,” Dr. Phillips said.

The current account deficit measures the amount the country spends overseas as against the amount that has been earned. At the beginning of the country’s Economic Reform Programme (ERP) in 2011/2012, the current account deficit was 13.4 per cent of GDP.

“When we do not earn enough, we have to make up the difference by capital inflows and borrowing if we are to maintain the same level of consumption and also maintain a healthy level of foreign reserves at the Bank of Jamaica,” Dr. Phillips pointed out.

As it relates to unemployment, the Finance and Planning Minister said the rate stands as 13.7 per cent, improving from 15.2 in 2013. “For us, this is still too high, but there is no doubt that we are heading in the right direction,” he noted.