KINGSTON, Jamaica — Opposition Leader Mark Golding has charged that the $1.4 trillion Budget presented by the Government for the 2026/27 fiscal year will not drive economic recovery.

Golding, who is currently making his contribution to the Budget Debate at Gordon House, has highlighted that the Budget also brings a tax package of $18 billion, at a time when the economy is still reeling from Hurricane Melissa, while the war in the Middle East threatens to drive up the cost of living.

“This is not a Budget to drive economic recovery,” he declared.

The Opposition leader lamented that, “despite this massive hit to the economy and the growing despair and anger of the many thousands of Jamaicans who really need help, the budget for the coming year allocates a contingency of $30 billion for capital expenditure on recovery from Hurricane Melissa”.

“That is less than one per cent of GDP (gross domestic product),” he remarked.

Golding noted that the Government’s 2026 Fiscal Policy Paper projects negative real GDP growth of 0.5 per cent of GDP for the upcoming 2026/27 fiscal year.

“This is not surprising, as the tax package will reduce disposable income and further constrain consumer demand,” he stated.

He warned that this aspect of the budget will therefore be pro-cyclical in its effect, suppressing consumer demand and re-enforcing the downward spiral of the economy.

The Opposition leader pointed out that while Jamaica’s fiscal reforms have achieved debt stabilisation, it is not the same as economic optimisation.

“As the Government’s track record shows, debt stabilisation can coexist with economic stagnation,” said Golding. But, he also pointed to the Government’s Fiscal Policy Paper which projects that the economy will suffer a severe contraction of -4.5 per cent of GDP for the current fiscal year 2025/26, resulting from the catastrophic impact and ongoing effects of Hurricane Melissa.

“Unlike the economic contraction brought by the COVID pandemic, the current downturn is caused by real damage to the productive capacity of the country, especially in western Jamaica,” he said.

Pointing to the Planning Institute of Jamaica’s most recent estimate of Melissa damage at US$12.2 billion (J$1.98 trillion), or approximately 56 per cent of GDP, Golding said, “We have been hit very hard, and we need to fight even harder to get out of the slump. Early investment in recovery is needed to turn the negative cycle occasioned by Melissa’s destruction into positive economic growth.”

Golding said the time to aggressively pursue recovery from the Melissa disaster and to set the platform for higher levels of sustainable growth is while the fiscal rules are suspended.

“Now is the time to drive GDP growth, as it will be more challenging once the maximum two-year suspension of the fiscal rules comes to an end. The law does not permit any further extension,” he reminded.

— Lynford Simpson