Economy Grows by 2.1% in 2nd Quarter

Prime Minister Bruce Golding said data released by STATIN showed that the Jamaican economy has grown by 2.1 percent in the second quarter of the year which is above the Government’s projection of 1.5 percent. In a statement, the Prime Minister said the growth is evidence that that the process of economic recovery is continuing.

Mr Golding said the Government is continuing discussions with multilateral partners to take the required actions that will combine the gains made in fiscal management and ensure the success of Jamaica’s economic programme as represented in the Standby Agreement with the International Monetary Fund (IMF).

“While the performance for this fiscal year is broadly on track, there are challenges that must be addressed in order to achieve our medium term targets through 2015/2016. Principal among these is the provision that must be made for payment of the seven percent increase granted to public sector workers inclusive of the arrears covering the period 2009 – 2011” Mr Golding explained. He noted that certain tax policy initiatives are also crucial to the success of the programme.

These include tax reform aimed at widening the tax base and eliminating anomalies in the tax system. Consultations with key stakeholders are well advanced and the deliberations of the Special Select Committee of Parliament are expected to be concluded in time to allow for implementation commencing January, 2012” Mr Golding said. The tax reform programme which his administration has undertaken is another essential component which the Prime Minister described as critical.

“An essential component of the tax reform programme is the reduction of discretionary waivers which deprive the government of revenue vitally needed to contain and eliminate the fiscal deficit,” Mr Golding said. The Prime Minister said the completion of the divestment of the Government’s shares in Clarendon Alumina Production is another significant requirement of the programme. He disclosed that negotiations are in their final stage and the negotiating team is expected to return to Jamaica this weekend with a draft agreement.

In his statement, PM Golding also explained that other challenges to be addressed include making provisions for legacy payments resulting from arbitration or judicial awards relating to Cricket World Cup, construction of the North Coast Highway and the revocation of the Jamaica Urban Transit Company bus franchise.