Minister of Finance, Audley Shaw has outlined several achievements of the Finance Ministry including lowest interest rates in 30 years, single digit inflation despite the global recession, the JDX programme which saves Jamaica $31 billion annually in interest charges and the strengthening and stabilizing of the Jamaican dollar.
Outlining the Government’s achievements since 2007 at a press conference at the Courtleigh Auditorium on December 14, 2011 Minister Shaw emphasized the importance of the JDX programme which has led to a sharp reduction in debt servicing costs.
“During previous administrations, the debt servicing as a percentage of the budget averaged in the 60 percent region, that is to say 60 percent or more of the budget was spent on repaying debts. In one case it was high as 63 percent.
He added that as a result of the JDX in its first full year, debt servicing costs were reduced to around 47 percent and is currently at 50 percent.
“We had the courage to sit with our stakeholders and recognize that the average interest rate profile of the entire stock of domestic debt was just too high at 17 percent. We sat down as a civilized and reasonable community, brought it down together to 12 percent and since that time we have seen Central Bank rates hitting a new low of six and a quarter (6 ¼ ) percent, the lowest in over 30 years” Minister Shaw said.
He said this initiative has led to sharp reductions in commercial banks’ lending rates and when combined with the initiatives to reduce the stamp duty on the transfer of mortgages, has increased loan portability.
Minister Shaw added that mortgage rates have decreased by an average of five percent and for typical home mortgages from an average of 15 percent to 10 percent.
Contact: Communications Unit-OPM