Gov't is delivering, time for private sector to invest — Byles
Private sector is the impetus behind any substantial growth in the economy, says Richard Byles.
But the growth numbers, which have been fairly positive, is not sufficient to push Jamaica out of its dire economic circumstances, according to the chair of the Economic Programme Oversight Committee (EPOC).
"One per cent growth or even two per cent is statistically important but it's not something that we feel and the man on the street doesn't necessarily feel it, and the only way we can really get that growth is by the private sector investing, " Byles said at an EPOC press conference at his Sagicor headquarters on Friday.
The International Monetary Fund (IMF) doesn't expect private investment to increase significantly over the life of the current medium- term economic programme, which runs to March 2017.
What's more, ongoing fiscal consolidation efforts and planned cuts to public sector capital spending — the Government plans to cap its capital budget at three per cent of GDP over the next three years, compared to prior projections of a gradual increase to 4.2 per cent of GDP by 2016/2017 — will further strain growth.
Jamaica is expected to grow by between zero and one per cent this fiscal year and by 1.4 per cent in 2014/2015, should there be no or little increase in capital spending by the private sector.
Byles reckons that the government has followed through with its commitments, so the private sector should now invest and look out for opportunities.
Last month was a busy legislative month as a number of bills to satisfy structural benchmarks under the International Monetary Fund (IMF) programme were tabled and passed in Parliament. These include the Secured Interest in Personal Property Act, Fiscal Incentives Legislation, and the Securities Act.
The March quarter will see another round of structural adjustments that require Parliament's approval. These are the Omnibus Banking Bill, Fiscal Rule Legislation, and additional tax reform.
According to Byles, the economic programme continues to be administered in an acceptable manner with the key targets being met to date. However, he expressed concern about the underperformance of tax revenues.
"We remain cautiously optimistic that the GOJ will continue to meet all the IMF targets and we urge the private sector to seize opportunities for growth presented by the fiscal consolidation and structural reforms," said Byles.