Chairman of the Economic Programme Oversight Committee (EPOC) Growth Council Keith Duncan says, as of February 5, the Government (GOJ) and the Bank of Jamaica (BOJ) were still on track to meet the quantitative targets under the GOJ Economic Reform Programme (ERP) as at the end of December 2020 with the exception of the tax revenues target.
The implementation of the majority of the priority actions for the GOJ ERP also continue to be delayed due to the effects of the novel coronavirus pandemic and are to be reviewed.
Duncan was speaking last Friday at an EPOC press briefing.
The projections for gross domestic product (GDP) contraction were again revised downwards from 7.9 per cent to 11.6 per cent for the current fiscal year by the Ministry of Finance, although the BOJ’s most recent survey of economic activity had showed signed of improvement. The BOJ forecasts a partial recovery of 3 per cent in FY 2021/22, which could trend up to 6 per cent if there is a strong recovery in the tourism sector.
“An eventual end to the COVID-19 pandemic, through the vaccination of the population and achieving herd immunity in the shortest possible period, is imperative for Jamaica to achieve sustainable growth path,” Duncan noted.
He stressed the importance of public private partnerships in returning Jamaica to a growth path. Private sector associations have entered into a memorandum of understanding (MOU) with the Ministry of Health and Wellness (MOHW) to participate in Jamaica’s COVID-19 vaccination programme.
Private sector bodies and entities have indicated their willingness to fund the vaccination of their employees and dependents and to look at contributing to vaccinating the at-risk population, which, assuming vaccines are available, should see Jamaica significantly surpassing the initial target of 16 per cent inoculation of the population and achieving herd immunity with joint public and private funding.
FISCAL DEFICIT INCREASES
Tax revenues for the fiscal year were also revised down again by $6.7 billion from $515.6 billion to $508.9 billion in the third supplementary budget laid in Parliament by Finance Minister Dr Nigel Clarke on January 19, 2021.
This fall in tax revenues and the expenditure projection suggest an increased fiscal deficit of $78 billion or 4 per cent of GDP for the current fiscal year, with a primary surplus of $58.2 billion or 3 per cent of GDP.
According to Duncan, Jamaica will not achieve the legislated target of wages and salaries of 9 per cent of GDP in the current fiscal year, and it will be a challenge for the country to achieve this fiscal rule in the 2021/22 and 2022/23 fiscal years.