Finance and Public Service Minister, Hon. Audley Shaw, is optimistic that Jamaica will record economic growth of between two and three per cent during the 2011/12 fiscal year.
The Minister, while noting that this is an “ambitious” projection, contends that this forecast is based on what he describes as adequate “momentum” built up in the various programmes being pursued and implemented by the administration.
“With proper acceleration and proper focus, these programmes will yield the target for 2011/12,” the Minister asserted.
Speaking at the Planning Institute of Jamaica (PIOJ) Growth Strategy Symposium at the Jamaica Conference Centre, downtown Kingston, today March 15, Mr. Shaw pointed to “bold and ambitious” initiatives pursued by the administration, particularly over the last three years, which have yielded economic stability.
The Minister said these included: “aggressive” re-engagement of multilateral development institutions, such as the International Monetary Fund (IMF), to secure resources to underpin the medium term economic programme; successful implementation of the Jamaica Debt Exchange (JDX) initiative; and implementation of a fiscal responsibility framework.
Mr. Shaw informed that re-engagement of the IMF has resulted in over US$1.7 billion being channeled into the economy consequent on the Standby Agreement negotiated with the Fund, at an interest rate of under 1.5 per cent. He said that as a result of this injection, gross reserves currently being held at the Bank of Jamaica have increased to US$3.37 billion, “the largest amount ever.”
“We have had a standby agreement that is now one year old and although the December test has not been reported on yet, I can comfortably say that we will pass all of the tests that we have faced so far,” he said.
Regarding the JDX, Mr. Shaw said the “phenomenal” success of this initiative, which recorded 99.2 per cent voluntary participation, along with the multilateral arrangements, have increased domestic and external confidence in the economy.
He pointed out that implementation of the fiscal responsibility framework has resulted in the administration exercising “greater control” over public expenditure, adding that “we have engaged, aggressively, in the divestment of loss making public entities.”
The Minister said consequent on the “mutual strenuous efforts” of the administration and its international partners, stability has been achieved, as manifested through a stable and revaluing exchange rate; reduction of Bank of Jamaica (BoJ) rates on their 30-day open market operations to 6.75 per cent; and a reduction in external debt servicing costs.
“We also have relatively low and stable inflation, despite the storm clouds that are on the horizon,” he added.
Going forward, Mr. Shaw said the government along with public and private sector stakeholders must focus on growing the economy, stressing that the measures undertaken were “necessary pre-requisites” for charting a path towards growth.
“We have to be looking at growth rates in excess of three per cent on a sustainable basis,” the Minister emphasised.
The symposium, which was attended by a wide cross section of private and public sector stakeholders, was aimed at reviewing and discussing the main elements of the administration’s Growth Inducement Strategy, which proposes short to medium term measures to stimulate economic growth over the next one to three years.
Activities pertaining to the Strategy’s development are being piloted by a Secretariat in the PIOJ.