Co-chairman of the Economic Programme Oversight Committee (EPOC), Richard Byles, says that financial year 2016/17 is “off to a good start”.

Byles told yesterday’s EPOC monthly press briefing at Sagicor’s head office in New Kingston that tax revenues have performed well, and was “a big plus for the country”.

“So following upon last fiscal year’s performance, which was good, April, which is like the opening batsman of the team, has performed very well, too,” he said.

He stated that $34 billion was collected in tax revenues, versus a target of $33.8 billion.

“We are hoping that that stands up for the rest of the fiscal year,” he said, noting that taxes on income and profits were ahead of target, while those for production and consumption and international trade were “just slightly behind”.

On the expenditure side, Byles noted that there was a “pretty large” under expenditure during April and May.

“In other words, we didn’t spend as much as was budgeted. About $2.5 billion on the recurrent side and about $0.5 billion on the capital side,” he pointed out.

Explaining the reasons, Byles said that this was mostly due to the fact that there was no budget in April, and no guidelines for expenditure.

“And in that case, I think, the government people were conservative in how they actually entered into new contracts and spent funds. The budget wasn’t approved until just recently. I think that you will see that, as this quarter goes along, the expenditure side will catch up with the budget numbers,” he observed.

Byles said that in respect of the primary surplus, the country recorded $6 billion for the primary surplus in April against the target of $3.6 billion.

“So, for the first month of the fiscal year (April), we were out of the blocks very fast. When we delve a little deeper to understand the performance of this primary balance, we see a couple of interesting things. First of all, tax revenues have performed well, that is a big plus. So following upon last fiscal year’s performance, which was good, April, which is like the opening batsman of the team, has performed very well, too,” he argued.

Byles also pointed out that:

STATIN has reported that the Jamaican economy grew by 0.7 per cent for the fourth quarter of 2015 when compared to the similar quarter of 2015.

Private sector credit recorded nominal and real growth of 10.5 per cent and 7.9 per cent, respectively, for the 12 months ending April 2016.

The Labour Force Survey indicates that there were 31,400 more persons in the labour force in January 2016, when compared to January 2015.

The Planning Institute of Jamaica (PIOJ) projects real GDP growth of 0.9 per cent to 2.0 per cent for fiscal 2016/17.

STATIN announced inflation of -0.4 per cent for April 2016. This was the fourth consecutive month of negative inflation.

The Bank of Jamaica (BOJ) reduced its benchmark 30-day Certificate of Deposit rate at the end of May by 25 basis points to 5.0 per cent. This reflected the BOJ’s outlook that inflation will continue to be at the lower end of the 4.5 per cent to 6.5 per cent target range.

Byles said that the report of the IMF review team, which visited Jamaica last month, was “quite positive” and will be going to the board during the course of this month.

“So we expect that the IMF board will approve the 11th and 12th review (of the Extended Fund Facility agreement with Jamaica) and, on that basis, Jamaica will get a drawdown of about US$80 million in due course,” he said.

Looking at the country’s performance for the fiscal year so far, he noted that the Net International Reserves (NIR) stood at US$2.3 billion at the end of May.

“This is quite a substantial NIR. In fact, it is ahead of the June target of $1.8 billion. So already in May we are ahead of June in respect of the NIR target,” Byles noted.