Proactive measures being considered by Ministry of Finance

Proactive measures being considered by Ministry of Finance

BY ABBION ROBINSON
Business reporter
roinsona@jamaicaobserver.com

Friday, March 27, 2020

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IN efforts to prepare for the impact of the coronavirus (COVID-19) pandemic on the economy, Minister of Finance Dr Nigel Clarke says his ministry and the Bank of Jamaica have developed a proactive approach in the method of scenario analyses.

Scenario analysis, which is one of the main forms of projection, does not try to show one an exact picture of the future, but instead presents several alternative future developments.

“While we can't forecast exactly how things are going to unfold — nobody can — what we have done is scenario analyses at various levels of intensity. We have [considered] what the impacts are going to be on the various macro and prudential variables and we have a response kit lined up for each scenario,” the minister, who was speaking yesterday at the Government's COVID-19 Digital Town Hall — Measures for Workers and Small Businesses, said.

He added that instead of being merely reactive, the ministry has already considered the necessary allocations to be made dependent on the various levels of impacts.

JAMAICA IS NOT ALONE

According to Clarke, due to the work done as a country over a number of years, Jamaica is in a better position than many neighbouring countries and has reliable options.

“The good news in all of this is that Jamaica has options. [We have] fiscal buffers and reserves, monetary buffers and reserves, and Jamaica is not alone. We exist in a multilateral system where we have access to and are members of the World Bank and the Inter-American Development Bank,” the minister asserted.

“I just want to reassure the Jamaican people that we're going to get a pretty hard hit economically from this, but the Government will be able to cushion that to some extent, and with the aim and objective of ensuring that our recovery is as quick as it can be,” he continued.

In the meantime, the minister also praised the support given from the financial institutions to the Government during the pandemic by forgoing the asset tax reduction for a year. This $3 billion was added to the stimulus package created by the Government to cushion the impact of the virus on businesses and workers. This, he said, had “reinforced the depth and the strength of the social partnerships and social capital in Jamaica”.


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