Duncan: Fiscal commissioner shortlisted
Published:Friday | October 21, 2022 | 12:10 AM
The candidate for fiscal commissioner is close to being selected and should serve to protect Jamaica's future from a heavy-spending finance minister, EPOC Chairman Keith Duncan said Thursday.
Shortlisted candidates have been interviewed for the position and a recommendation made for the position, Duncan said at his quarterly press briefing.
EPOC, or the Economic Programme Oversight Committee, was set up in 2013 to monitor the Government's performance under targets agreed to by the State and its lender, the International Monetary Fund (IMF).
The fiscal commission, which emerged after the IMF rescue deal, aims to monitor the minister of finance and central government's accounts.
“We have been able to attain macro and fiscal stability because we have had a commitment of ministers of finance over the past 10 years. We cannot always count on that and that's why we need an independent body to do the hard work and analysis,” said Duncan.
The fiscal commission will begin operating somewhere around mid- to late 2023, he said.
The position of commissioner, which has a term of seven years, is salaried, whereas EPOC members are voluntary.
Last February, the Senate approved legislation to establish the fiscal commission, which would support other independent bodies, such as the central bank, Duncan reasoned.
“An independent fiscal commission and an independent central bank put us in greater institutional framework and confidence in the management of fiscal and monetary affairs,” he said.
The country has suffered from high debt at levels nearly one and half times the size of the economy. The debt levels are now just below 96 per cent of the size of the economy up to March 2022. This reduction in debt has given the minister of finance more spending room than in years, despite a pandemic.
Duncan said that the real threat arises when Jamaica reaches 60 per cent of debt-to-GDP, seen largely as a sustainable level of debt, he said. It, therefore, opens fiscal space for investment in people and public services to levels that were absent over the last 20 to 30 years, he said.
“We have to safeguard our future. And the independent fiscal commission will be a critical institution in that regard,” said Duncan.
The fiscal commission will monitor compliance of Jamaica's fiscal rules. It will keep the public informed on economic matters and will provide analysis on fiscal policy development. Some of the fiscal oversight functions currently carried out by the Auditor General's Department will be shifted to the fiscal commission.
EPOC's outlook sees the Jamaican economy recovering to pre-COVID levels by the end of the 2022-23 fiscal year. EPOC, however, noted that the prospects for sustained growth are uncertain for fiscal year 2023-24 and into the medium term because of continued and elevated geopolitical tensions, inflation, and interest-rate risks.
Inflation still hovers outside the target range, but the annual out-turn eased to 9.3 per cent in September from 10.2 per cent in August.
“This out-turn represents the 14th consecutive month that inflation has breached the BOJ's target range,” said Duncan.
The BOJ increased its benchmark policy rate to 6.50 per cent effective September 30. A year prior to that, the rate was only 0.5 per cent.
The Government's fiscal accounts for April to August reflected a deficit of $2.1 billion, which was lower than the budgeted deficit of $30.5 billion. The primary surplus amounted to $56.6 billion, outperforming the budgeted target of $27.2 billion.
“This favourable performance was driven largely by a strong tax revenue performance, which, in part, outweighed the impact of the marginally higher than budgeted expenditure,” said Duncan.
He said adding that this fiscal deficit was also $12.8 billion lower than the deficit generated for the corresponding period in 2021.