No Fall-Out Anticipated From 2014/15 Primary Surplus Shortfall

Head of the Department of Economics, University of West Indies (UWI), Mona, St. Andrew, Dr. Damien King, says no fall-out is anticipated from Jamaica’s four-year Extended Fund Facility (EFF), despite the country recording a budgetary primary surplus shortfall for the 2014/15 fiscal year.

Set a target of $121.3 billion for the end of the March 2015 quarter, Jamaica registered $117.2 billion, a shortfall of $4.1 billion.

“I would think the missing of the target does not represent a failure of commitment on behalf of the Government. The other thing to bear in mind is that two years into the programme, Jamaica has now shed the reputation it had for not being faithful and committed in implementing IMF programmes, for the previous 25 years. So now we have credibility,” Dr. King said.

He was speaking on the Jamaica Information Service’s (JIS) television programme Issues and Answers.

Dr. King noted that the country “has a lot of credibility because of the discipline we have exercised in putting this programme (in place); discipline that even reasonable people thought was beyond the management capacity of the government.”

“So I think because of that, now anybody looking at this will believe that it was a genuine miss and not…a failure to be committed to the programme. We have a credible economic programme and it seems to me that we are still making a credible attempt to put…the programme…. in place. I don’t think this signals any weakness,” he stated.

Meanwhile, Dr. King underscored that a balanced budget is important for economic growth.

“You balance the budget so people can go about their business without worrying about a default next quarter, a fiscal crisis, and capital flight; and you build highways so that goods and people can move around very quickly. I think that just creating a better environment for growth is going to yield a growth benefit,” he stated.

An IMF team is currently in the island conducting its eighth quarterly review of Jamaica’s performance under the EFF between the Government and the multilateral agency.