Jamaica denied J$2b of foreign aid
Published:Wednesday | August 10, 2011 | 12:00 AM
- But deep cuts contain deficit
Foreign aid to Jamaica has slowed down amid uncertainty about the International Monetary Fund agreement and the secretive discussions on the country's performance on the last two tests.
Jamaica was expecting aid flows of J$2.8 billion in the first fiscal quarter ending June, but got only J$663 million - a J$2.1b or 76 per cent shortfall - according to newly released financial data out of the Ministry of Finance.
The European Union has already acknowledged that it has cut off distributions pledged to Jamaica, pending more certainty on the IMF talks.
Jamaica was also J$2.4 billion off-target on tax collections, forcing a re-engineering of its spending plans in the quarter. Finance Minister Audley Shaw issued spending warrants valued at J$79.5 billion, but this was J$9.6 billion less than budgeted.
A third of the savings, J$3.1b, was from lower-than-projected domestic debt-servicing charges, while J$5.6b was due to retrenched capital and recurrent programmes.
Total revenue and grants for the period amounted to J$73.6 billion - J$64.4b in the form of taxes.
The dramatic cuts were more than sufficient to keep Shaw well within his first-quarter deficit mark. Spending overshot revenue by just J$5.9 billion, compared to the J$12 billion that was projected.
Shaw borrowed J$41 billion during the period, but paid down J$45 billion of debt.
The primary surplus, which measures central-government activity minus debt obligations, closed the quarter at J$14.9 billion or J$3 billion better than expected.
Shaw warned in a televised national broadcast on the weekend that new revenue measures as well as additional spending cuts were imminent.