A sharp divergence between the central bank’s approach to monetary policy and the Ministry of Finance’s fiscal policy direction contributed to a more than $15-billion hike in additional interest-rate payments as set out in the First Supplementary Estimates of Expenditure.
Per capita savings have fallen below zero for the first time since 1985, according to data published by the Statistical Institute of Jamaica.
Prime Minister Bruce Golding noted following tabling of the supplementary budget this week that a local businessman had contacted him to express “surprise that the government budget had gone up and not down.”
The Government yesterday signalled that it would be going to the market to plug the $6-billion gap in the Budget. “There is going to have be some increase in borrowing,” Finance Minister Audley Shaw told journalists at yesterday’s post-Cabinet press briefing.
If anyone still harboured any doubt – unlikely as that would be – that this Government, and this country too, are firmly hemmed in between a rock and a hard place, the First Supplementary Estimates tabled Tuesday in Parliament would have soundly dispelled any such notion.
The Government has tacked on just over $6 billion to its spending plans for the fiscal year despite repeated pronouncements from Prime Minister Bruce Golding that a major shortfall in revenue would lead to a sharp cut in the Budget.
Several questions are now being asked about how the Government will finance the $561-billion revised Budget tabled in Parliament yesterday.
Finance Minister Audley Shaw and Opposition Leader Portia Simpson Miller are certainly at odds over the state of Jamaica’s negotiations with the International Monetary Fund (IMF) but, in a rare moment of convergence of views, they have found common ground on the need for commercial banks to cut lending rates.