The unprecedented spread of Covid-19 has created a global health crisis. Each day brings new developments as countries around the world seek to “flatten the curve” and achieve “social distance” which is significantly, sharply and suddenly curtailing economic activity around the world.
The Jamaican government, led by the Most Hon. Prime Minister Andrew Holness, has taken strong action to protect the Jamaican population.
In economic terms, the Covid crisis will certainly have adverse economic implications for the world and for Jamaica.
The good news, however, is that the Government of Jamaica is providing a $25 billion stimulus, the largest fiscal stimulus in Jamaica’s history, that could not come at a better time.
Pumping $25 billion into the economy at a time of uncertainty like this helps to support economic activity in Jamaica.
This is always desirable when the global environment weakens.
The reduction in GCT from 16.5% to 15% puts $14 billion back in the hands of consumers and supports consumption. The $1 billion MSME tax credit provides critical cash-flow support to MSME’s and the dramatic reduction in regulatory fees for coconut, coffee, cocoa and spice farmers incentivizes greater production.
In this time of need for the country, it is also important that Jamaicans support our domestic economy by buying Jamaican. This would enhance the effect of these measures even further by supporting domestic production and domestic economic activity.
This is a time that Jamaicans are coming together to help each other, a time of shared sacrifice for the benefit of all Jamaicans.
The Banking sector has volunteered to forgo the reduction of the asset tax that I announced earlier, for one year, which adds $3 billion to the $7 billion Covid Contingency I announced in my budget presentation bringing our total Covid Fiscal Contingency to $10 billion.