Finance minister opens Budget Debate today

Finance minister opens Budget Debate today

BY BALFORD HENRY
Senior staff reporter
balfordh@jamaicaobserver.com

Thursday, March 07, 2019

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THE 2019/20 budget debate gets going at Gordon House this afternoon with the opening contribution from the Minister of Finance and the Public Service Dr Nigel Clarke.

Clarke’s budget speech is expected to be highlighted by the fact that while Jamaica’s gross domestic product (GDP) recorded growth of only 0.9 per cent in 2017/18, all performance criteria to the end of June 2018 were met, and implementation of the economic programme under the Precautionary Stand-By Agreement has remained strong.

Tax revenues continue to be robust, bolstered by the continued profitability of companies, increased employment levels, and higher consumption.

At the end of December 2018 the lower-than-budgeted expenditure, along with the strong revenue performance, contributed to the primary balance out-turn exceeding target. And, as the Government’s Fiscal Policy Paper (FPP) has revealed, despite the lowered projection for growth, the economy has now registered 15 consecutive quarters of real growth, with the outturn at the end of June 2018 and September 2018 being 2.2 per cent and 1.8 per cent growth, respectively.

Focusing on the new fiscal year, which begins on April 1, the Government intends to build on the strong performances of revenues over the last four consecutive years and its “unwavering” adherence to fiscal discipline by crafting a budget consistent with the achievement of the International Monetary Fund targets.

Projections are for 1.5 per cent growth figures, down from 2018/19 prediction of 1.8 per cent, with inflation projected at 3.7 per cent as against 4.3 per cent in 2018/19, with oil prices projected to stabilise at an average of US$54.92 per barrel as against a 2018/19 average of US$62 per barrel.

The minister is also expected to explain how he plans to finance the budget, with tax revenues projected to climb from an estimated $518.4 billion in 2018/19 to $575.7 billion in 2019/20, a 57 billion increase.

For the 2019/20 fiscal year, the Government has presented a budget of $803 billion, with $731 billion allocated for recurrent (housekeeping) expenses and $72 billion for capital (development) projects.

Following Dr Clarke’s opening presentation this afternoon, starting at approximately 2:00 pm, the budget debate will resume on Tuesday, March 12, with the Opposition’s spokesperson on finance, Mark Golding. Leader of the Opposition Dr Peter Phillips will make his contribution to the debate on Thursday, March 14. Prime Minister Andrew Holness will speak on Tuesday, March 19, and Dr Clarke will close the debate on Wednesday, March 20.

On Friday, March 22, the Senate is expected to debate the budget.

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