IMF, deficit surprise as Shaw opens debate
Published:Friday | April 29, 2011 | 12:00 AM
Finance Minister Audley Shaw yesterday said Jamaica would be negotiating a 24-month extension of the IMF-backed bailout programme beyond the original deadline of May 2012.
Shaw offered nothing more on the issue as he opened the budget debate in Parliament yesterday, but International Monetary Fund (IMF) technocrats have already signalled that they would be open to the extension.
Other influential watchers of the economy, including that of former Prime Minister Edward Seaga, has touted a new deal with the IMF as necessary so as not to derail the fragile economy, and move from stability to recovery and growth.
In his report on the performance of the economy, Shaw said the central government had a smaller fiscal deficit than expected - 6.1 per cent compared to the targeted 6.5 per cent gap in revenue and spending - and would lower that to 4.6 per cent by year end March 2012.
He plans to expand tax collections by about 10 per cent or J$28 billion, but said $5.6 billion of the new funds were arrears to be collected from divested entities, Air Jamaica and Sugar Corporation of Jamaica
The budget is predicated on seven per cent inflation this year, and Shaw estimates that the economy will expand by 1.5 per cent this fiscal year, and two per cent thereafter, closing out three years of recession.
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