Primary surplus remains strong – EPOC
Co-Chair of the Economic Programme Oversight Committee (EPOC) Keith Duncan at the quarterly press briefing.
The country’s primary surplus which was $135.9 billion for the fiscal year to March 2017, is $12.8 billion ahead of its fiscal year target of $123 billion.
This good news was delivered by the Co-Chair of the Economic Programme Oversight Committee (EPOC) Keith Duncan at a quarterly press briefing held at JMMB’s headquarters on Haughton Avenue, Kingston earlier Friday.
The main driver behind this buoyant primary surplus figure is the over performance of tax revenues in the last fiscal year.
Duncan pointed out that the current primary surplus figure represents about 7.7 per cent of GDP which is above the target of seven per cent.
“If the trend in the robustness of tax revenues continues, there is increased room for capital spending," he said.
The target for tax revenues as at March 2017 was set at $440 billion with the country surpassing that with actualized revenue of $458.3 billion.
Non-borrowed reserves climbed to US$1.93 billion, a significant increase on the target of US$1.47 billion.
STATIN also reported that the unemployment rate for January 2017 was 12.7 per cent, a 0.6 percentage point decline compared to the rate of 13.3 per cent for January 2016.
The head of EPOC reported that Jamaica is on target to meet monitored quantitative performance criteria and indicative targets under the Precautionary Stand-By Agreement (PSBA) signed with the IMF in November 2016.
According to EPOC, based on their evaluation of information available at the end of March, Jamaica’s fiscal and monetary performance remains strong, with the country hitting all of the performance targets at the end of the fiscal year based on current available data.
Duncan noted that STATIN reported that the economy continued to report growth during the third quarter of the fiscal year with October to December of 2016, seeing an estimated GDP increase of 1.1 per cent.
“For financial year 2016/17 the economy is expected to record growth of 1.2 percent relative to 2015/16. STATIN also reported that the merchandise trade deficit for January 2017 was US$322.9 million an increase of 23.3 per cent when compared to the US$261.8 million recorded for the same period for 2016.
“Driving this performance was imports which were up by 25 per cent or US$87.9 million and exports which increased by 30 per cent or US$26.8 million. This is encouraging and I do hope we can sustain this,” said Duncan.
He attributed the over performance of tax revenues intakes to improved compliance, higher levels of company profits and an increased country wage bill reflective of higher levels of employment.
The Co-Chair of EPOC said: “In relation to the tax revenues the increase has not been surprising but rather it was not budgeted for which means there are some underlying factors driving it meriting further and deeper analysis to be done by the Ministry of Finance.”
On the expenditure side, the number came in at $J 503. 4 billion, falling short of the target by $5 billion. Capital expenditure was J$42 billion coming in less than the targeted J$44.8 billion.
“We know that capital expenditure is where we really need to increase the spend in order to stimulate growth through this line item,” said Duncan.