Jamaica’s latest fiscal ‘problem’?


My fellow blogger Dennis is an economist. I am sharing his thoughts on the Jamaican economy, because he is the expert – and because after the latest Planning Institute of Jamaica (PIOJ) quarterly press briefing, all kinds of questions were popping up in my mind. One of them was: Why is the weather always used as an excuse for a decline? And my major question was: How is the Jamaican Government actually going to foster economic growth – which is currently minimal? Even the tender green shoots are in danger of wilting and burning up (depending on the weather)…

Jamaica: Political Economy

Newspaper reports this week in Jamaica indicated finance minister Audley Shaw saying Jamaica now had a fiscal surplus. I have not seen the actual data, but the report indicated that Jamaica’s primary surplus for the last fiscal year was J$136 billion, some 7.7 percent higher than programmed. Now, I have not seen a full table, so cannot be sure that the comments make sense in terms of the budget figures we normally see, but let’s put that technicality to one side, for the moment.

Now, there are several problems with this outcome. First, missing targets in an IMF program is not necessarily a good thing. Such programs are designed in a particular way; the elements have a certain coherence, so the level of the fiscal balance is meant to be consistent with the level of other variables, such as the stance of monetary policy, or the balance of payments…

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