Minister of Finance and the Public Service Audley Shaw says that market analysts have marvelled at the high level of oversubscription of the Government’s most recent external bond issue.

According to Shaw the analysts were not only astonished by the fact that it was 3.8 times the take-up, but also that the “historic” yields were equivalent to rates that apply to investment-grade issuers.

The yields were five per cent on bonds due in 2028 and 6.45 per cent on those bonds due in 2045.

“These are historically the lowest yields that the Government of Jamaica has been able to secure for long maturity global bonds,” Shaw told a press conference at his ministry, National Heroes Circle, Kingston, yesterday.

He explained that the intervention in the bond market was fully in concert with the overarching efforts to reduce the national debt and extend maturities.

“This is a resounding vote of confidence in the ongoing work to maintain macroeconomic stability and to reform the Jamaican economy,” Shaw stated.

He noted that it included fundamental changes in: the independence of the Bank of Jamaica; exchange rate flexibility; public sector transformation; and reduced red tape for business activity.

“These are vital reforms, but hard work remains to be done to ensure that growth is strong and equitable,” he cautioned.

He noted that the Government has undertaken consistent measures to ensure a steadfast path of fiscal consolidation and debt reduction in order to build a strong and prosperous economy.

“We have had to make sacrifices to ensure this. The sacrifices have been deep, and there is still more to be done. However, the Government is committed to making it work and the pain is bearing fruit,” Shaw said.

He explained that this most recent demonstration of the “green shoots” was the Government’s bold and successful entry into the international bond markets in August 2017.

In that action, US$145 million of high interest rate shorter-term global bonds were repurchased by the Government, while US$869 million in long-term global bonds were also issued in the international bond market, providing the funds utilised for the repurchase.

The Government also exercised its option to prepay US$526 million of US dollar bonds in the domestic market through utilisation of some of the proceeds from the international bond market issue.

Using the opportunity to expand on the essential role of facilitating growth to enable Jamaica to return to prosperity and stability, Shaw noted that private investors would remain the main engine of growth.

He pointed to the increase in bauxite exports, acceleration of the boom in the business process outsourcing sector, expansion and diversification of the hospitality (tourism) sector and the important productive infrastructure enhancements — primarily ports, roadways and irrigation — occurring in Jamaica.

He said that specific focus has been placed on the linkages between the agriculture and tourism sectors.

He said that the competitive exchange rate and free movement of capital are already contributing to powerful improvements in the current account.

He said that the positive trends have served to increase employment to the highest level since the 2008 international financial crisis.

Shaw also highlighted the strong performance of the tourism sector in creating jobs, pointing to the most recent Labour Force Survey showing that 35,800 new jobs had been created between April 2016 and April 2017.

“Jamaica needs stability as a vital condition for achieving the growth rates that will benefit everyone. It has been essential in encouraging the important private investments that will drive that growth,” he concluded.

Also speaking at the briefing was minister of state in the ministry, Rudyard Spencer.