Minister of Finance and the Public Service Audley Shaw says that a new definition of public debt will become effective on April 1.

According to Shaw, the new definition identifies public debt as the consolidated debt of the Specified Public Sector, except the Bank of Jamaica, net of any cross holdings.

Specified Public Sector comprises the central government and public bodies, excluding any public body certified by the auditor general as primarily carrying out functions that are of a commercial nature. All Government-guaranteed debt is, therefore, captured in the new definition, he told the House of Representatives last Thursday.

He said that the new public debt definition is consistent with the definition being utilised by the International Monetary Fund (IMF) under the precautionary Stand-By Arrangement.

It is also in line with international standards and consistent with the public sector debt statistics guide developed by the IMF.

Shaw said that he welcomed the development. He also announced that, with the adoption of this new measure, Jamaica’s public debt is expected now to be 115 per cent of gross domestic product (GDP) at end of financial year 2016/17, compared to 124.1 per cent under the old definition.

“At the end of fiscal year 2017/18, the debt-to-GDP ratio is projected to be 108.6 per cent of GDP. Of significance, this brings us that much closer to our sustainable legislative debt target of 60 per cent of GDP by fiscal year 2025/26, or before,” Shaw said.

He added that affirmation of the country’s sound debt management is evidenced by the fact that Jamaica received three positive ratings action during 2016/17. Moody’s Ratings Agency upgraded the country’s sovereign ratings from Caa2 to B3 in November 2016, and Standard and Poor’s Global Rating and Fitch Ratings affirmed the country’s ‘B’ ratings in September 2016 and February 2017, respectively.

“All outlooks are rated ‘stable’,” Shaw pointed out.

— Balford Henry