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EPOC commits to continuing its role

Wednesday, December 20, 2017

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The Economic Programme Oversight Committee (EPOC) has acknowledged calls for a stronger independent body to be put in place and possibly entrenched in legislation, to provide oversight over Jamaica's programme for economic and social affairs.

The committee, in reporting that Jamaica is on track to meet the December 2017 quantitative and indicative targets under the Precautionary Stand-by Arrangement with the International Monetary Fund (IMF), said it believes this discussion is an important one to have as Jamaica moves to protect the gains all have sacrificed for and ensure the continuity of oversight, as work continues for a stronger and resilient economy.

EPOC said it is committed to continue in its role of monitoring the macro fiscal programme of the Government of Jamaica (GOJ) ensuring independent reporting on the progress in these areas.

“It was also noted that there are ongoing efforts to establish the autonomy of the Bank of Jamaica and to strengthen the capacity of Parliament for fiscal and budgetary analysis. This institutional framework will provide even greater independence and critical review of important monetary and fiscal targets. EPOC will continue to monitor developments in these areas,” the report said.

“EPOC will continue to utilise all existing channels implemented for sharing of information, such as: monthly report submissions in the print media, quarterly press briefings and interviews, digital engagement via our social media channels and through community engagement sessions,” it continued.

Public Sector Wage Negotiations

EPOC said it supports the IMF position that delayed public sector wage negotiations pose significant budgetary risks, and encouraged the Government to quicken the pace to conclude wage negotiations.

“EPOC continues to monitor plans and imperatives that support the legislated fiscal rule of wages and salaries representing no more than 9 per cent of the gross domestic product in the 2018/19 fiscal year,” it said.

Jamaica on track to meet December 2017 targets

The committee, which met on December 11, 2017, reviewed the latest available data on the performance of the economy. It noted that based on preliminary results for performance at end-October 2017, fiscal year-to-date tax revenues at end-October 2017 were at $271.9 billion, which exceeded the budgeted target of $260.3 billion.

The Ministry of Finance and the Public Service notes, however, that for the month of October 2017 revenues and grants were behind budget by $2.9 billion.

EPOC said the significant shortfall relates to expected flows programmed in the budget that were to come in from the three public entities which were incorporated into the budget.

“These flows are expected to come into the Consolidated Fund at a later date,” it said.

Expenditure for the first seven months of the fiscal year (April-October) was $7.2 billion below the GOJ budget (-2.2 per cent). Of this amount, recurrent expenditure was $7 billion below budget while capital expenditure was $200 million below budget (-0.7 per cent).

As a result of the revenue and grants performance and the under-expenditure for the first seven months of the fiscal year, the primary balance of $65.5 billion exceeded the $48.7-billion budget target for April-October 2017.

Non-Borrowed International Reserves at the end of October was US$2.38 billion against the programme target of US$1.78 billion for end-December 2017. BOJ anticipates that this positive performance will continue through the end of December 2017.

The fiscal year-to-date inflation was recorded at 4.7 per cent, within the BOJ's target of 4 to 6 per cent.

Jamaica continues to meet its macro fiscal targets. Inflation at 4.7 per cent is stable and within the targeted range. Interest rates are trending downwards and non-borrowed reserves of US$2,377 million remain strong and will exceed the December programme target.

Tax revenues continue to be buoyant which has given the GOJ the opportunity to table a supplemental budget, increasing spending in key areas such as national security, infrastructure and tourism. The PIOJ projects growth to be in the range of 1.5 per cent to 2.5 per cent for the October to December quarter.

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