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Government spent $194.7b April to July

Friday, October 11, 2019

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KINGSTON, Jamaica — Government expenditure for the first four months of fiscal year 2019/20 (April-July) totalled $194.7 billion.

Of this sum, recurrent expenditure amounted to just over $179 billion, with capital expenditure totalling $15.6 billion, according to the Government's 2019/20 Fiscal Policy Paper Interim Report.

The document indicates that while the figure is lower than budgeted this year, it was approximately $6.2 billion or 3.3 per cent more than what was spent for the corresponding period in 2018/19.

A major contributor to the under-spending, the Policy Paper notes, was lower than estimated interest costs, both on the domestic and external debt portfolios.

A breakdown of the recurrent expenditure figure shows that the out-turn was $822.5 million below budget, but just over $8 billion higher than the out-turn for the corresponding period in 2018/19.

The lower expenditure over the first four months of 2019/20 is attributed to interest payments falling short of budget by $3.4 billion, which was outweighed by higher than programmed spending on programmes and employee compensation.

The expenditure on programmes totalled $65.2 billion, which was $2.25 billion or 3.6 per cent greater than budget, and $2.59 billion or 4.2 per cent higher than April to July 2018.

This resulted from the advancement of some payments that were scheduled for the second quarter of the 2019/20 fiscal year, in order to offset an identified delay in capital spending.

According to the Policy Paper, this over-performance is expected to normalise as the year progresses.

Meanwhile, compensation to employees amounted to $71.9 billion, which accounted for 52.5 per cent of overall non-debt expenditure.

Payments were $326.2 million above budget, due to actual wages and salaries being higher than programmed.

Employees' compensation comprises $66.16 billion earmarked for wages and salaries, and $5.76 billion in employers' contribution.

The Policy Paper further indicates that employees' compensation was $4.65 billion or 6.9 per cent ahead of the corresponding period in 2018/19, due primarily to the negotiated wage increase for public-sector workers for 2019/20.

Interest payments totalled just over $42 billion, which was $3.4 billion or 7.5 per cent below budget.

Shortfalls in domestic and external payments were identified as having contributed to the shortfall.

Domestic interest payments totalled $11.65 billion, which was $315.8 million or 2.6 per cent below budget, while external payments were $3.08 billion lower.

Capital expenditure over the period totalled $15.6 billion, representing 78.6 per cent of the programmed $19.85 billion.

This, according to the Policy Paper, reflects a negative variance of $4.24 billion or 21.4 per cent.

The document attributes the below-target performance to slower than programmed implementation of some capital projects.

It cites the delay in the commencement of the Southern Coastal Highway Improvement Project (SCHIP), for which there was a programmed expenditure of approximately $2.4 billion during the period, as having accounted for 54.5 per cent of the underperformance.


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