Public Debt Has Remained Flat Despite Impact of Covid-19 – PM

Jamaica’s public debt has remained flat over the past year despite the major fall in Government revenue and increase in expenditure as a result of the coronavirus (COVID-19).

This was disclosed by Prime Minister, the Most Hon. Andrew Holness, while making his contribution to the 2021/22 Budget Debate in the House of Representatives on Thursday (March 18).

He said that at the start of the 2020/21 fiscal year, the Government had cash reserves of approximately $90 billion, and when the COVID-19 pandemic occurred, “we were able to finance a 3.5 per cent fiscal deficit with nominal debt virtually flat”.

The achievement, he said, is notable at a time when Governments, globally, issued a record US$16.3 trillion in new debt in 2020 and are expected to borrow another US$12.6 trillion this year to cushion the blow of the pandemic.

Mr. Holness said that Jamaica has also been able to maintain its highest credit rating in 20 years from Standard and Poor’s and in 14 years from Fitch “while many other countries have suffered downgrades”.

The Prime Minister argued that maintaining the country’s macroeconomic stability and debt sustainability “in the face of the most severe health and economic crisis the world has ever seen in nearly 100 years did not happen by chance”.

“We were able to do this because [of] the buffers that we had built up from prudent fiscal management over a number of years,” he pointed out.