Byles says significant growth needed this year
CO-CHAIRMAN of the Economic Programme Oversight Committee (EPOC), Richard Byles, says that achieving significant growth in 2014/15 is the big challenge for the Government.
"I think that by the close of 24 months after the signing of the [IMF] agreement we should be seeing and feeling some impact of growth in terms of employment. Not just statistical growth. I think that this is the big challenge for this fiscal year," Byles told the monthly EPOC media briefing at Sagicor Group head office, New Kingston, yesterday.
He said that the first year's performance under the economic programme has brought sharply into focus the two critical challenges for the second year: To achieve a primary balance target that is $10 billion higher than last year's; and to achieve meaningful economic growth.
He also stated that EPOC "feels strongly" that the Government will do everything in its power to achieve the primary balance target. However, he insisted that meaningful economic growth will be much more challenging.
He noted that the debt-to-GDP ratio had closed from 146 per cent in March 2013, and is likely to end up at 138 per cent of GDP this March. But he pointed out that there is still a long way to achieving the 60 per cent of GDP target.
"I don't want the Government or anybody else to feel overconfident, that having gone through the first 12 months successfully that the rest of the objectives are going to be a breeze. I don't think that the minister thinks so, and I don't think anyone else should think so," Byles said .
He also noted that there was a "very challenging primary surplus target for the coming fiscal year". He pointed out that the surplus was $110 billion last year, and this year it will be $121 billion, or $10 billion more.
"We really had to fight tooth and nail as a country to do $110 billion last year, and it won't be any less of a fight this year," he said. "I think what it leaves to achieve is growth, and this is proving to be a little more elusive than we had hoped for. I think that, whilst the market conditions are better for growth, it needs much more than just the magical hand of the market to drive growth," he stated.
Added Byles: "Both the private sector and the Government need to work together in a conscious, organised, collaborative effort to try to get some significant growth out of this year. By significant growth, I mean that we need to see some impact on employment numbers."
Byles, head of Sagicor Group and the only member of the EPOC team at the briefing, said if Jamaica meets the fourth-quarter primary surplus target under the current Extended Fund Facility agreement with the International Monetary Fund it would be a tremendous development for the country. But, he admitted that while Finance Minister Dr Peter Phillips has publicly announced that, based on data to which he has access, Jamaica has met the target, and that he expects a positive programme review for the end of March, EPOC had not seen the document.
"However, on the presumption that the minister's information is accurate, this is a tremendous development for the country, for which so many have sacrificed to secure success," he said.
April marks the end of the final quarter of the first year of the agreement, which was approved by the IMF board on May 1, 2013. The economic programme, which is aimed at averting near-term crisis risks and creating the conditions for sustained growth, entails critical steps and policy reforms to significantly enhance fiscal and debt sustainability and growth-enhancing structural reform.
Byles co-chairs the committee, a joint public/private sector oversight mechanism, with Bank of Jamaica Governor Brian Wynter.
The committee also includes the Financial Secretary Devon Rowe; Jacqueline Sharp, CEO of ScotiaBank Group; Christopher Zacca, president of the Private Sector Organisation of Jamaica; Ralston Hyman, economist; Judith Green, head of the Co-ordination and Implementation Unit; Patrick Hylton, managing director, NCB Group; Keith Duncan, managing director of JMMB Group; Helene Davis Whyte, general secretary of the Jamaica Association of Local Government Officers; and Senator Norman Grant, Government senator.