THE year 2012 may see the end of a two-year public sector wage freeze, a new Jamaican government and even the popularised Mayan prediction: the end of the world.

But what’s clear is that Jamaica will still have a huge debt burden — targeted to fall to 120 per cent of GDP by 2014 and expected to hit $1.8 trillion in another two years — and continued low growth.

The upside of the current macroeconomic programme, currently being administered under a stand-by arrangement with the International Monetary Fund (IMF), is the possibility of practically eliminating fiscal deficit that now stands at well over 12 per cent of GDP, below-10 per cent interest rates, exchange rate stability and a balance of payment surplus.

But there are still risks looming on the horizon.

Inter-American Development Bank (IDB) country representative for Jamaica Gerard Johnson outlined a few at yesterday’s Private Sector Organisation of Jamaica (PSOJ) chairman’s club forum held at the Jamaica Pegasus hotel in New Kingston.

Aside from natural disasters, imported inflation could lead to more price spikes, interest rates could return to upward trajectory, while fiscal targets could slip over the next few years.

Johnson believes that these risks can be mitigated should tight fiscal discipline and lower government borrowing prevail.